Daily Industry Report - April 11

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman, President & COO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

CMS finalizes ACA network adequacy rule

By Rebecca Pifer - The adequacy of plans’ provider networks is key for members actually being able to access care covered by their health insurance plan. States and the federal government oversee the networks in the ACA marketplaces, but enforcement has been lax, critics and researchers say. Read Full Article…

VBA Article Summary

  1. Expanding Network Adequacy Standards to State-Run ACA Exchanges: The Biden administration has finalized new network adequacy standards for state-run Affordable Care Act exchanges, effective from 2026. These standards are designed to ensure that health plans provide adequate geographic access to a range of specialty care providers, mirroring the requirements currently applied to federal marketplaces. This move comes in response to findings that a significant number of plan issuers on federal exchanges did not comply with these standards in the 2023 plan year, with similar compliance issues reported by states.

  2. Inclusion of Routine Dental Care as Essential Health Benefit: In addition to the network adequacy standards, the new rule allows states the option to include routine dental services, such as cleanings and diagnostic x-rays, as an essential health benefit covered by plans in the state exchanges starting in 2027. This represents a significant expansion of coverage, aiming to improve overall health outcomes by integrating important dental care services into standard health insurance plans.

  3. Alignment and Extension of Open Enrollment Periods: The rule introduces modifications to the enrollment periods for plans offered through state exchanges to align them with the federal exchange schedule. Starting from an unspecified date, open enrollment will run from November 1 to January 15. Furthermore, the regulation extends the special enrollment period for low-income families, ensuring broader access to health insurance coverage and addressing gaps in healthcare accessibility for underserved populations.

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More Health Systems Likely to Drop Out of Medicare Advantage, Analyst Predicts

By Joyce Frieden - More health systems are going to be opting out of Medicare Advantage (MA) plans, George Hill, a managing director at Deutsche Bank in Boston, predicted Monday at a "Wall Street Comes to Washington" webinar hosted by the Brookings Institution. Read Full Article…

VBA Article Summary

  1. Increased Opt-Outs by Large Provider Organizations: There's an anticipated rise in large healthcare providers opting out of Medicare Advantage (MA) networks. This movement is driven by several issues such as the complexities of prior authorizations, frequent claims denials, delayed payments, and insufficient rates. Such barriers hinder access to care across various services. The strategy may not be an outright withdrawal but could involve restricting access to specific facilities or services to MA patients, reflecting the financial strains MA plans are facing and the expectation of worsening conditions.

  2. Disputes Over Rates and Service Reimbursement: The tension between MA plans and healthcare providers primarily revolves around reimbursement rates and service limitations. Providers argue that MA plans reimburse at lower rates compared to traditional Medicare and often delay or deny care through mechanisms like prior authorization. There's also contention around telehealth services, with providers advocating for equal pay to in-person visits, contrary to payers' views of telehealth being a cheaper alternative.

  3. Challenges and Changes in Health Insurance Dynamics: The article highlights several key issues impacting the health insurance landscape. CMS is scrutinizing MA plans for overassigning diagnostic codes to inflate payments. There's political scrutiny over MA's supplemental benefits and coverage scope. Post-COVID-19, Medicaid re-determinations led to higher than expected disenrollments, mostly for administrative reasons, yet the ACA exchanges and employer-based insurance have absorbed many former Medicaid beneficiaries. Additionally, the cost of prescription drugs, like GLP-1 inhibitors for weight loss, poses dilemmas for coverage decisions, with Pharmacy Benefit Managers (PBMs) potentially playing a role in mitigating high drug costs.

HVBA Poll Question - Please share your insights

When it comes to receiving compensation on insurance programs, which payment structure do you prefer?

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Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question “strongly disagree” with “RWJBarnabas’ decision to drop coverage of medications for weight loss among employees, as reported in the article referenced below*.”

14.06% of respondents “disagree,” 11.68% strongly agree,” 10.19% agree” while 10.11% are “neutral.” 

*Article Reference: States clamping down on coverage of weight-loss drugs

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Kaiser Permanente uses AI to redirect 'simple' patient messages from physician inboxes

By Dave Muoio - Artificial intelligence categorization can help stem the flood of patient messages that would otherwise demand physicians’ expensive time, Kaiser Permanente researchers report. Read Full Article…

VBA Article Summary

  1. Efficiency through Natural Language Processing (NLP): A study published in JAMA Network Open demonstrates how Kaiser Permanente's Desktop Medicine Program successfully applied real-time NLP algorithms to categorize over 4.7 million patient messages, effectively directing them to the most appropriate respondent. By doing so, 31.9% of these messages were resolved without needing the direct involvement of physicians, instead being handled by a regional team comprising medical assistants, pharmacists, and other healthcare professionals. This system not only streamlined the handling of patient inquiries but also significantly reduced the workload on physicians, allowing them to focus more on in-person patient care.

  2. Implementation and Results: The NLP system was trained on 20,000 patient messages annotated by triage nurses and physicians and integrated into the electronic health record system with an initial focus on adult and family medicine, later expanding to pediatric inquiries. During the study period from April to August 2023, 77.6% of messages received labels, with medication-related inquiries being the most common. The system's ability to categorize messages facilitated over 1.5 million message resolutions by the regional team, covering queries as simple as pharmacy hours or medication refills, thereby alleviating the physicians' message burden.

  3. Future Prospects and Improvements: While the program significantly reduced the number of messages reaching physicians, the study acknowledges the potential for further enhancements, such as better handling of messages with multiple labels or those without any labels, and the integration of advanced large language models like GPT-4. The researchers also highlighted the program's broader implications for monitoring care trends and managing healthcare delivery more efficiently. Additionally, the study underlines a growing interest in leveraging AI technologies within healthcare settings to optimize patient communication and care management processes, with other organizations exploring similar AI-driven solutions to enhance efficiency and patient care.

Another ransomware group is seeking a payout from Change Healthcare, according to cybersecurity analysts

By Paige Minemyer - After the hackers responsible for the cyberattack on Change Healthcare took the ransom and ran in a reported exit scam, cybersecurity experts have found a new post that is seeking a payout from UnitedHealth Group to recover the data. Read Full Article…

VBA Article Summary

  1. Data Breach and Ransom Payment Allegation: A post from RansomHub claims that four terabytes of data were stolen from Change Healthcare by the administration of BlackCat, or ALPHV. Despite a $22 million ransom allegedly paid by Change Healthcare and UnitedHealth to recover the data and prevent leaks, the post asserts that RansomHub, not ALPHV, possesses the data. Although neither UnitedHealth nor Optum has confirmed the ransom payment, researchers have found payment logs suggesting the transaction occurred.

  2. Ransomware-as-a-Service Operation and Speculations: Analyst Dominic Alvieri speculates that RansomHub might have acquired the ALPHV affiliate responsible for the hack or might be executing an "entry scam" to extort additional funds from UnitedHealth. ALPHV operates under a Ransomware-as-a-Service model, providing hacking software to affiliates who conduct the attacks and share in the ransom proceeds. The stolen data reportedly includes sensitive information such as medical records, payment details, and Social Security numbers, affecting major entities like Medicare, CVS Health, and MetLife.

  3. Government and Industry Response: In reaction to the cyberattack, the State Department announced a reward of up to $10 million for information leading to the identification or location of individuals associated with BlackCat or ALPHV, underlining the seriousness of attacks against U.S. critical infrastructure. Additionally, UnitedHealth Group's efforts to restore services, including a $2.5 billion advance to affected providers and the proposed Health Care Cybersecurity Improvement Act of 2024, underscore the broad and significant impact of the breach on healthcare services and the urgent call for enhanced cybersecurity measures across the sector.

Clinical deterioration AI contributes to reduced care escalation risk

By Shania Kennedy - Researchers have demonstrated that an artificial intelligence (AI) model designed to detect clinical deterioration was associated with a significantly decreased risk of inpatient escalations in care, according to a study recently published in JAMA Internal Medicine. Read Full Article…

VBA Article Summary

  1. AI-Driven Tools for Early Detection of Clinical Deterioration: Clinical deterioration in hospitalized patients is a significant concern, contributing to an estimated 15 percent of avoidable hospital deaths. Early detection is crucial but challenging. Recent studies, including one that evaluated the use of the Epic Deterioration Index (EDI)-based alerts in an academic medical center, have shown that AI-driven tools can significantly reduce the risk of care escalations, such as transfers to intensive care units or rapid response team activations. The study found a 10.4 percentage point reduction in care escalations among patients at the EDI score threshold.

  2. Evidence of Effectiveness and the Need for Further Research: While early warning scores exist to identify patients at high risk of deterioration, evidence for their effectiveness has been limited. The research team's work contributes to this body of evidence, suggesting that AI-driven models, specifically one utilizing the EDI, are effective in reducing inpatient care escalations. The researchers advocate for further testing of these models in additional care settings to solidify their effectiveness and utility in clinical practice.

  3. Comparative Success in Pediatric Care: Beyond adult care, AI models have also demonstrated potential in pediatric settings. A machine learning model using the Deterioration Risk Index (DRI) was found to be significantly more accurate and sensitive than existing tools in predicting pediatric deterioration risks, including for cardiac and malignancy-associated conditions. Following the deployment of this model in a clinical setting, a remarkable 77 percent reduction in deterioration events was observed over 18 months compared to previous programs, underscoring the potential of AI-driven interventions across different patient populations.

Investigation reveals UnitedHealth, Cigna, Aetna made millions in fees from out-of-network claims

By Rylee Wilson - Major insurers made millions in fees by using MultiPlan, a data analytics firm, to determine how much to pay providers for out-of-network claims, according to an investigation from The New York Times. Read Full Article…

VBA Article Summary

  1. MultiPlan's Role and Impact: MultiPlan advises insurers on the amounts to pay for out-of-network claims, often leading to payments much lower than the billed amounts. Insurers like UnitedHealthcare, Aetna, and Cigna then charge self-funded employers a fee based on the savings, incentivizing lower payments to providers. This practice has led to insurers earning substantial fees, with UnitedHealthcare reportedly making $1 billion annually from such programs. However, patients can be left responsible for the difference, sometimes facing large out-of-pocket expenses.

  2. Corporate and Patient Perspectives: The article highlights cases where patients were burdened with hefty bills due to insurers not fully covering out-of-network costs. Additionally, a New Jersey trucking company was charged a $50,000 fee by UnitedHealthcare for a single hospital bill. In response to the criticism, MultiPlan, UnitedHealthcare, Cigna, and Aetna defended their practices, arguing they help control costs and protect against providers' "egregious" out-of-network charges. MultiPlan specifically contested the negative depiction, emphasizing its role in avoiding costly negotiations and managing healthcare system economics.

  3. Calls for Investigation and Oversight: The investigation into MultiPlan's practices, based on extensive research and interviews, has sparked demands for regulatory scrutiny, particularly from the American Hospital Association (AHA). The AHA has urged the Department of Labor, which oversees employer-sponsored health plans, to investigate MultiPlan and similar companies for potential violations and harmful incentives. Despite the Department's limited resources for oversight, with one investigator for every 8,800 health plans, the AHA emphasizes the need for immediate action to address these practices.

Regulators urged to be more active in preventing health insurance discrimination

By Rayne Morgan - A group of non-profit consumer organizations is urging state regulators to perform more due diligence in guarding against health insurance discrimination in their respective states. Read Full Article…

VBA Article Summary

  1. Prevent Discriminatory Benefit Design: Representatives from various health advocacy groups highlighted the importance of preventing discriminatory practices in benefit design during a presentation to the National Association of Insurance Commissioners. They urged state and federal regulators to rigorously review benefit features, such as drug formularies, cost-sharing structures, and coverage exclusions, for potential discrimination. The presentation emphasized the necessity of ensuring that prior authorization processes are evidence-based and that artificial intelligence used in these processes does not lead to discrimination.

  2. Ensure Compliance and Address Complaints: The advocacy groups called for regulators to proactively ensure insurance companies comply with the upcoming final ruling on Section 1557 of the Affordable Care Act, which focuses on non-discrimination in healthcare. This includes issuing bulletins or guidance to insurers, tracking and timely responding to complaints, conducting data calls, and market conduct exams. They stressed the importance of making such information public to aid advocacy efforts.

  3. Review and Revise Essential Health Benefits (EHB) Benchmark Plans: The groups asked regulators to actively review and update EHB benchmark plans to ensure they do not contain discriminatory benefit design features. This involves scrutinizing coverage exclusions for essential services, like gender-affirming care or durable medical equipment, and eliminating arbitrary coverage caps that discriminate against people with certain disabilities. The aim is to promote inclusivity and prevent any form of discrimination in health insurance plans.

How are Medicare plans lowering drug costs for beneficiaries?

By Victoria Bailey - Affordable access to prescription drugs is a necessity for managing chronic and acute conditions and staying healthy. However, as drug costs rise, both affordability and accessibility are dwindling. Read Full Article…

VBA Article Summary

  1. Strategies to Combat High Prescription Drug Costs: The article discusses various methods Medicare and Medicare Advantage plans use to manage and reduce the high costs associated with prescription drugs for their beneficiaries. These include promoting the use of generic drugs, which can be significantly cheaper than their brand-name counterparts; employing formulary management to encourage the selection of cost-effective medications; establishing preferred pharmacy networks to offer lower copayments and coinsurance rates; and working with pharmacy benefit managers (PBMs) to negotiate lower drug prices and rebates from manufacturers.

  2. Challenges and Scrutiny in Cost Management: Despite these strategies, challenges persist in managing prescription drug costs effectively. The use of step therapy to promote generic drug use, while cost-effective, can adversely affect patient outcomes if a specific brand is needed. Furthermore, the role of PBMs in the healthcare system has faced criticism for potentially incentivizing the choice of more expensive drugs due to rebate structures and for a lack of transparency that may hinder their effectiveness in reducing costs for beneficiaries. Additionally, the consolidation of the PBM market into a few dominant companies raises concerns about competition and its impact on drug pricing and availability.

  3. Future Prospects with Drug Price Negotiation: The Inflation Reduction Act introduces a significant change by allowing Medicare to negotiate drug prices directly with manufacturers, starting with specific drugs covered under Medicare Part D in 2026 and Part B in 2028. This policy has the potential to improve the affordability of high-cost drugs significantly. The first ten Part D drugs selected for price negotiation, which account for a substantial portion of Part D prescription drug costs, illustrate the policy's potential impact. However, the full effects of this approach on drug affordability will not be clear until the negotiated prices are implemented and the scope of drugs eligible for negotiation expands.

Hospital and insurer battles over Medicare Advantage set to grow

By Caitlin Owens - Tensions between hospitals and Medicare Advantage insurers are poised to keep growing as the program gets larger and the federal government takes a harder line on health plans. Read Full Article…

VBA Article Summary

  1. Financial Strains and Contract Terminations: Hospitals and insurers are navigating financial pressures related to Medicare Advantage (MA) plans, with some providers terminating contracts due to MA plans denying claims, underpaying, and delaying care authorization. This financial strain is exacerbated by inflation and labor shortages, making the lower reimbursement rates from government programs compared to commercial insurance increasingly untenable for providers.

  2. Administrative and Policy Responses: The Biden administration is implementing stricter measures on MA plans, including cuts to health plans' base payments in 2025 and clarifications on inpatient rate payments. These efforts aim to address hospitals' concerns over payment and preauthorization issues but pose a challenge to insurers who must now find ways to maintain profitability, possibly leading to reduced benefits or narrower provider networks for enrollees.

  3. Implications for the Future of Medicare Advantage: The ongoing conflict between providers and insurers over MA payment and policy issues reflects broader challenges within the U.S. healthcare system, including the aging population and the shift towards reliance on MA plans. With predictions that 60% of seniors will be enrolled in an MA plan by 2030, the dynamics of healthcare provision and insurance coverage are poised for significant changes, impacting access, cost, and quality of care for a large segment of the population.

Latest CMS Telehealth Updates

VBA Article Summary

  1. Telehealth Policies and Mental Health Coverage: The Medicare MLN booklets outline important changes in telehealth policies, including extensions of pandemic telehealth flexibilities through the Consolidated Appropriations Act, 2023, and the 2024 Final Physician Fee Schedule. Notably, for mental health coverage, telehealth services provided at home are payable at non-facility rates until December 31, 2024. Coverage is expanded to include marriage and family therapist (MFT) and mental health counselor services via telehealth. Starting in 2025, certain in-person visit requirements will be implemented for mental health services delivered through telehealth, with exceptions under specific conditions.

  2. FQHC/RHC Booklet Updates: For Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), new billing permissions starting January 1, 2024, include remote physiologic monitoring and other telehealth services under general care management code 0511. This update also clarifies that FQHCs and RHCs can deliver mental health visits via interactive telecommunication technologies, with a note on the forthcoming in-person visit requirements starting January 1, 2025. Additional guidance is provided for telehealth service delivery without geographic restrictions until December 31, 2024.

  3. State Legislation and Policy Updates: The article highlights state-specific telehealth policy updates, such as changes to Medicaid reimbursement requirements and telehealth modalities. It points out significant legislative efforts across various states to modify telehealth guidelines, including California's new requirements on telehealth modality choice and the District of Columbia's billing amendments for Assertive Community Treatment (ACT). Additionally, updates in states like Indiana, Nevada, and New York focus on expanding telehealth services and addressing barriers to access, underlining the evolving landscape of telehealth policy at the state level.