Closing the Loopholes: The Biden-Harris Administration’s Action Against “Junk Insurance”

By Julia Ji, Ariana R. Stobaugh, and Emma Arroyo - On March 28, 2024, the Biden-Harris Administration released final rules intended to lower health care costs and protect consumers from being induced into purchasing so-called “junk insurance” policies (the “Final Rules”). Read Full Article…

VBA Article Summary

1. Closing Loopholes: The Final Rules aim to close loopholes allowing "junk insurance" issuers to mislead consumers. By realigning federal definitions with intended coverage scopes, these rules enhance transparency to enable consumers to make more informed choices, thus preventing the purchase of highly restricted and discriminatory plans with inadequate coverage during critical healthcare needs.

2. Restricting Coverage Periods: Under the Biden-Harris Administration's action, the Departments of Health and Human Services, Labor, and Treasury revised the federal definition of short-term, limited-duration insurance (STLDI). The new rules cap the initial contract term at three months and limit total coverage periods to four months, including renewals. This restriction aims to restore STLDI's traditional role as temporary coverage, preventing its misuse as a long-term alternative to comprehensive plans.

3. Enhancing Consumer Awareness: The revised standards also include improved notice requirements for both STLDI and fixed indemnity excepted benefits coverage. By prominently displaying clear and concise notices in policies and marketing materials, issuers must now communicate coverage limitations and differentiate these plans from comprehensive options. This increased transparency empowers consumers to make better-informed decisions, aligning with the goal of expanding access to high-quality, affordable coverage and ensuring that individuals have the necessary protections and benefits they expect.

Three Key Challenges for Healthcare CISOs

By Sahan Fernando - Cybersecurity is continuously evolving and adapting, which can be onerous in health care environments especially as the number of cyberattacks against hospitals — often in pursuit of sensitive patient and financial data — skyrockets. Read Full Article…

VBA Article Summary

1. Complexity of Connected Devices: The proliferation of connected devices in healthcare facilities presents a significant challenge for CISOs. From medical equipment to administrative systems, each device represents a potential entry point for cyber threats. Managing the security of this diverse and expanding network requires robust strategies and resources.

2. Supply Chain Vulnerabilities: The recent ransomware attack on Change Healthcare underscored the vulnerability of healthcare supply chains to cyber threats. CISOs must not only secure their own organization's systems but also ensure the security of third-party vendors and partners. The interconnected nature of healthcare operations means that a breach in one part of the supply chain can have cascading effects throughout the industry.

3. Impact on Hospital Operations: Inadequate security measures can have wide-ranging impacts on hospital operations. Beyond the immediate financial and reputational damage caused by a cyber attack, disruptions to critical systems can jeopardize patient care and safety. CISOs in the healthcare space must navigate the delicate balance between securing sensitive data and maintaining the smooth functioning of essential medical services.

Cyber Threat: Why We Continue to Get It Wrong

By Mac McMillan - Recently a good friend sent me an article that described analysis performed by an independent organization that performs cybersecurity research and the recommendation they made regarding the paying of ransoms.  They make the supposition that stopping the payment of ransoms will end the ransomware threat once and for all. Read Full Article…

VBA Article Summary

1. Lack of Reporting Obligations: The current regulatory framework only mandates incident reporting from healthcare and publicly traded companies, leaving millions of other entities unchecked. This absence of obligation means a significant portion of incidents remain undisclosed to the public, fostering a culture of secrecy and hindering effective response measures.

2. Ransom Payment Dilemma: Paying a ransom becomes a calculated risk, weighing the potential benefits against the consequences. Criminalizing payments, as suggested, would penalize victims multiple times over—first for the incident, then for the payment, and finally for resultant fines. Such punitive measures may disproportionately affect smaller entities, failing to effectively deter ransomware extortion in the long term.

3. Inadequate Security Approach: Addressing ransomware requires a fundamental shift in how we approach cybersecurity. Proactive measures such as rigorous testing, due diligence, and embracing standards in design are essential. Organizations must acknowledge the persistent and evolving nature of the threat, investing in robust security infrastructure and practices rather than relying on reactive solutions or budget constraints.

AMA: 80% of docs have lost revenue amid disruptions from Change Healthcare cyberattack

By Paige Minemyer - Most physicians felt the disruption caused by the cyberattack on Change Healthcare, and many were still seeing the effects in early April, more than a month after the hacking was revealed, according to a new survey from the American Medical Association (AMA). Read Full Article…

VBA Article Summary

1. Widespread Disruptions and Financial Strain: Over 77% of surveyed medical professionals experienced service disruptions due to a cyberattack announced on Feb. 21. The fallout includes suspended claims payments for 36% of respondents, inability to submit claims for 32%, and challenges in verifying patients' eligibility and receiving electronic remittance advice for 22% and 39% respectively.

2. Adoption of Workarounds and Resource Allocation: The crisis forced physicians to resort to manual and electronic workarounds, with 31% deploying both methods to ensure claims are processed. Consequently, 80% reported revenue loss due to unpaid claims, necessitating additional staff and resources for revenue cycle management, as highlighted by 85% of respondents.

3. Personal Financial Burden and Outside Assistance: More than half (55%) had to utilize personal funds to sustain practice expenses, with 31% unable to meet payroll and 44% unable to purchase crucial supplies. While some received financial aid from entities like UnitedHealth Group (UHG) and Medicare, the majority faced significant financial setbacks, with instances of physicians shouldering additional costs ranging from $50,000 to $100,000 and even forgoing salaries to keep practices afloat. The situation is compounded by looming Medicare payment cuts, exacerbating the strain on already vulnerable practices.

Why So Many Nurses Are Fleeing Healthcare — And How Hospitals Can Address The Problem

By Katie Adams - Nearly one-fifth of nurses are projected to leave the healthcare workforce by 2027. The American Organization for Nursing Leadership published a report revealing one of the biggest reasons nurses are exiting the industry: their managers are too busy to train and support them. Read Full Article…

VBA Article Summary

1. Importance of Nurse Managers: Nurse managers are pivotal in enhancing nurse retention, patient outcomes, and hospital innovation, according to a recent report by AONL in collaboration with Laudio. These managers handle crucial administrative tasks such as scheduling, compliance, recruiting, and coaching, which are vital for the smooth functioning of healthcare facilities.

2. Impact of Meaningful Interactions: The report emphasizes the significance of meaningful interactions between nurse managers and their team members. Recognizing achievements and celebrating personal milestones can significantly reduce nurse turnover rates. Even one meaningful interaction per team member per month can decrease turnover by 7%, underscoring the importance of fostering a supportive work environment.

3. Addressing Span of Control: Elevated spans of control pose challenges for nurse managers in engaging with their teams effectively. High spans of control can lead to managers feeling stretched thin, hindering their ability to provide adequate support and mentorship. To mitigate this issue, hospitals are advised to consider adding assistant nurse managers to teams with high spans of control and, where feasible, reducing the span of control by restructuring departments to ensure optimal managerial effectiveness and staff satisfaction.

PLANSPONSOR 2024 HSA Conference: Offering an HDHP

By Remy Samuels - Before offering a high-deductible health plan to employees, plan sponsors need to consider several pros and cons, while also keeping in mind the demographics of their workforce, according to panelists who spoke Wednesday at PLANSPONSOR’s HSA Conference. Read Full Article…

VBA Article Summary

1. Cost Benefits and Employee Control: HDHPs offer employers a lower-cost health plan option, allowing savings to be passed on to employees through reduced health plan costs. This empowers employees with more control over their paychecks, enabling them to allocate funds towards spending, saving, or contributing to an HSA.

2. Disparity in HDHP Adoption: While 53% of employers offered HDHPs in 2023, there's a notable gap between large and small employers, with 74% of companies with 5,000 or more employees offering HDHPs compared to only 39% of companies with fewer than 100 employees. Larger companies typically have more resources to provide diverse health plan options, leading to higher HDHP adoption rates.

3. Navigating Financial Challenges and Additional Benefits: Employers must understand their employees' financial situations when transitioning to HDHPs to avoid potential stress from high deductibles. Offering education on saving methods and additional benefits like HSAs, supplemental health plans, and medical financing can mitigate risks and improve employee comfort with out-of-pocket costs. Effective communication strategies, such as using personas, help employees comprehend the benefits and make informed decisions during open enrollment.

Corporate Medicine 2.0 — Special Purpose Acquisition Companies in the United States

By Nishant Uppal, M.D., M.B.A., and Zirui Song, M.D., Ph.D. - Acquisitions of U.S. health care entities by private equity firms have come under scrutiny. But the back end of corporate acquisitions — the exit strategy — has remained largely ignored, despite arguably being more important in the long run. Private equity firms typically sell acquired entities to another private company within 3 to 7 years. Read Full Article…

VBA Article Summary

1. Emergence of SPACs in Health Care: Traditionally, private health care companies have pursued initial public offerings (IPOs) to go public, but a growing trend involves utilizing Special Purpose Acquisition Companies (SPACs). Unlike IPOs, SPACs involve merging with a "shell company" specifically created for the purpose of acquisition, providing an alternative route to public listing.

2. Advantages of SPACs over Traditional IPOs: SPACs offer several advantages for health care firms. They provide a pathway to public markets for companies that might not meet the stringent financial targets set by underwriters for traditional IPOs. Moreover, reduced fees and potential avoidance of shareholder lawsuits make SPACs an appealing option. Executives also perceive SPACs as offering more accurate share prices due to the involvement of private equity firms and confidential information sharing.

3. Policy Implications and Future Outlook: The rise of SPACs in health care raises policy concerns regarding increased corporatization and potential impacts on prices, market power, and clinical outcomes. While SPACs offer a lifeline for capital-strapped health care entities, policymakers must balance transparency requirements with regulatory oversight to mitigate risks to patients and investors. Monitoring the effects of SPACs on ownership, prices, and clinical outcomes remains crucial as these vehicles continue to shape the landscape of health care financing and delivery.

‘Magic number’ for a comfortable retirement surges to $1.46 million

By Ayo Mseka - Americans’ “magic number” for a comfortable retirement has reached an all-time high at $1.46 million, rising much faster than the rate of inflation and swelling more than 50% since the pandemic began. Over a five-year period, people’s “magic number” has jumped by a whopping 53% from the $951,000 target that Americans reported in 2020. Read Full Article…

VBA Article Summary

1. Rising Retirement Expectations: Northwestern Mutual’s 2024 Planning & Progress Study reveals a significant increase in the perceived "magic number" for a comfortable retirement, now standing at $1.46 million, a 15% surge from the previous year. This surpasses current inflation rates, reflecting growing consumer sentiment towards higher retirement costs.

2. Generational Shift in Financial Planning: The study highlights notable differences in retirement planning across generations. Younger individuals, recognizing the importance of early wealth accumulation, start saving for retirement at a significantly earlier age than previous generations, with Gen Z beginning at 22, compared to boomers at 37. However, concerns persist among Gen X and boomers, with only half feeling financially prepared for retirement.

3. Impact on Financial Professionals: Financial professionals can leverage these insights to tailor conversations effectively, particularly with younger clients who exhibit greater awareness of retirement planning. Emphasizing the individuality of financial goals and the need for comprehensive, adaptable plans, professionals can address concerns surrounding retirement savings, tax minimization strategies, and the importance of maintaining a strong client-advisor relationship.

Massachusetts lawmakers tell FTC, DOJ to take hard stance on Optum-Steward deal

By Dave Muoio - All 11 of Massachusetts’ federal legislators are calling on regulators to keep a short leash on UnitedHealth Group’s proposed acquisition of Steward Health Care’s physician group, even if that means risking the close of nine more hospitals. Read Full Article…

VBA Article Summary

1. Steward Health Care's Financial Struggles: Steward Health, encompassing thousands of physicians across eight states, faces significant debts to vendors and landlords, exacerbated by the closure of New England Sinai Hospital. Financial woes are attributed to alleged value extraction practices by executive leadership and prior private equity involvement.

2. Regulatory Scrutiny and Legislative Concerns: The pending acquisition deal by UnitedHealth Group's Optum is undergoing regulatory review, including scrutiny from Massachusetts health regulators and federal antitrust authorities. Democratic legislators, including Sen. Warren and Sen. Markey, are urging caution, expressing concerns over Optum's significant influence over U.S. physicians and its potential impact on healthcare access, quality, and costs.

3. Challenges and Potential Consequences: Warren, Markey, and Massachusetts representatives highlight the risk of an uncompetitive healthcare marketplace dominated by a vertically integrated UnitedHealth colossus. They stress the importance of preserving community care by keeping Steward hospitals open and caution against a merger that could lead to higher healthcare costs and further consolidation in the industry. Regulatory agencies have signaled a tough stance on vertical integration deals and expressed intent to crack down on opportunistic dealmaking.

2nd ransomware group reportedly tries to extort Change Healthcare

By Giles Bruce - A second ransomware group is reportedly trying to extort UnitedHealth Group's Change Healthcare over the recent cyberattack. Read Full Article…

VBA Article Summary

1. RansomHub's Threat: Hackers operating under the moniker RansomHub have allegedly obtained 4 terabytes of data from Change Healthcare and are threatening to sell it on the dark web unless payment is made. This demand for payment represents a classic case of ransomware tactics, with the hackers leveraging stolen data as leverage for financial gain.

2. Double Extortion Tactics: This incident suggests a "double extortion" strategy, where hackers not only encrypt data but also threaten to release it publicly unless a ransom is paid. Change Healthcare's previous payment of $22 million to the BlackCat/ALPHV ransomware gang indicates a vulnerability to such tactics, potentially making them a recurring target for cyber extortion.

3. Response and Dilemma: Change Healthcare acknowledges the reports and states they are cooperating with authorities. Cybersecurity experts like Ken Dunham caution against paying ransom but acknowledge that in some cases, it may be the most pragmatic option for affected businesses. This highlights the difficult decisions companies face in balancing the risks and consequences of ransomware attacks against the potential costs of compliance.