Daily Industry Report - April 15

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)

Drug shortages worst since tracking began in 2001

By Joseph Choi - The number of U.S. drug shortages has reached a new all-time high, according to new data released by a top pharmacist trade group. Read Full Article…

VBA Article Summary

  1. Persistent Issue: The American Society of Health-System Pharmacists (ASHP) has been diligently monitoring domestic drug shortages since 2001, revealing a concerning trend. The latest data, as of March, unveils a staggering 323 active drug shortages across the United States, surpassing the previous record of 320 shortages documented in 2014.

  2. Complex Causes: Despite the urgency of the situation, a significant challenge lies in pinpointing the root causes behind these shortages. Alarmingly, 60 percent of manufacturers have failed to provide reasons for the shortages, according to the ASHP report. Reasons cited by manufacturers range from supply and demand imbalances to manufacturing issues, business decisions, and raw material shortages.

  3. Critical Impact: The ramifications of these shortages extend beyond mere inconveniences, affecting critical healthcare areas. ASHP underscores the vulnerability of all drug classes to shortages, with particular concern surrounding generic sterile injectable medications, including cancer chemotherapy drugs and emergency medications essential for hospital crash carts and procedural areas. Moreover, ongoing shortages of therapies for attention-deficit/hyperactivity disorder (ADHD) pose significant challenges for clinicians and patients alike. Despite efforts by the Department of Health and Human Services (HHS) to address the issue, ASHP expresses disappointment in proposed penalties against hospitals, arguing that such measures could exacerbate the strain on institutions already grappling with the impact of shortages.

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FDA commissioner tells lawmakers his agency needs more authority to prevent drug shortages

By Zoey Becker - After investigations into the FDA’s response to severe drug shortages and other issues, the House Committee on Oversight and Accountability finally had its long-awaited chance to grill the agency’s commissioner Robert Califf, M.D., on a wide range of issues at a Thursday hearing. Read Full Article…

VBA Article Summary

  1. Critique of FDA's Performance: Committee Chairman James Comer highlights the FDA's shortcomings in ensuring food and drug safety, citing a lack of preparedness for crises and a significant decrease in overseas inspections, as evidenced by a 79% drop in foreign plant inspections in 2022 compared to 2019.

  2. Refereeing Role of the FDA: FDA Commissioner Califf employs a metaphor likening the FDA to referees in a game, where Congress sets the rules and drugmakers are the players. He stresses the need for additional regulatory measures to enhance the FDA's oversight of the pharmaceutical supply chain, particularly regarding drug shortages, which require more consistent and digitalized data.

  3. Call for Additional Authority: Ranking committee member Jamie Raskin supports granting the FDA additional authority to strengthen supply notification requirements and mitigate drug shortages. However, discussions often revolve around the FDA's perceived lack of action in addressing supply chain weaknesses, with lawmakers pushing for more proactive measures while the FDA emphasizes the need for increased authority and resources to fulfill its regulatory role effectively.

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

Have a poll question you’d like to suggest? Let us know!

House Members Struggle to Craft Road Map for Future of Telehealth

By Shannon Firth - Telehealth is here to stay, but deciding how to pay for it, how to deliver it across state lines, and how to prevent it from eclipsing in-person care remain ongoing issues, said lawmakers and witnesses during a hearing of the House Energy & Commerce Subcommittee on Health on Wednesday. Read Full Article…

VBA Article Summary

  1. Telehealth Evolution: The COVID-19 pandemic catapulted telehealth from a marginal practice to a mainstream healthcare delivery method, with a remarkable surge from less than 1% to 80% of medical visits conducted remotely between March and April 2020. However, usage has since declined, settling at around 16% by mid-2023. Despite this, the pandemic underscored telehealth's potential and prompted bipartisan efforts towards a permanent telehealth framework.

  2. Legislative Action: With the impending expiration of pandemic-era telehealth flexibilities at the end of the year, lawmakers are under pressure to enact lasting solutions. Reps. Brett Guthrie and Anna Eshoo lead bipartisan efforts in the subcommittee, advocating for 15 bills aimed at shaping a new telehealth landscape. Witnesses and experts unanimously agree that sustaining telehealth expansion is critical to healthcare resilience and ensuring continued access to care, especially for Medicare beneficiaries.

  3. Challenges and Considerations: While there's broad consensus on the benefits of telehealth, debates persist around reimbursement rates, patient choice, and regulatory issues. Disagreements arise over whether telehealth should be reimbursed at parity with in-person care and concerns about maintaining quality and access, particularly for vulnerable populations. Addressing licensing complexities and defining the limits of telehealth practice remain pivotal areas for legislative intervention to ensure equitable and effective healthcare delivery.

State public option plans don't reduce premiums, result in low enrollment: industry-backed study

By Noah Tong - Instead of enacting public option plans, states should target reinsurance programs, a new report from the Partnership for America's Health Care Future argues. Read Full Article…

VBA Article Summary

  1. Public Option Failures: The analysis reveals that states with public option healthcare plans have struggled to control premium spending and meet reimbursement rate targets. Despite initial expectations, the implementation of public options has not led to the anticipated reductions in premium costs or widespread coverage expansion.

  2. Colorado's Example: While proponents of public options tout benefits like reduced premiums, the reality in Colorado suggests otherwise. Although the state reported a 30% decrease in premiums compared to non-option plans, only a minority of plans met initial-year premium targets, with the percentage declining further in subsequent years. This highlights the gap between expectations and outcomes in public option implementation.

  3. Unintended Consequences and Enrollment Challenges: The study points to specific policy decisions in Washington and Colorado, such as setting reimbursement rates and implementing hospital rate floors, which have led to unintended side effects. These factors contribute to low enrollment rates, with public option plans in both states enrolling less than 1% of their populations. Furthermore, projections for Nevada's upcoming public option indicate potential challenges in meeting premium reduction goals, suggesting a need for reevaluation and consideration of alternative approaches like reinsurance programs.

US sues Regeneron, alleging false price reporting on Eylea

By Kristin Jensen - The U.S. Department of Justice on Wednesday accused Regeneron of defrauding Medicare by knowingly inflating the average sales price for its top-selling eye drug Eylea. Read Full Article…

VBA Article Summary

  1. Undisclosed Price Concessions: Regeneron faces allegations of withholding information about substantial price concessions given to drug distributors, resulting in an inflated average sales price for Eylea. Prosecutors claim these undisclosed concessions led to higher Medicare payments to doctors than warranted.

  2. Unfair Competitive Advantage: The Justice Department contends that Regeneron's tactics provided it with an unfair edge over competitors. By offering discounted cash prices for Eylea while allowing clinics to benefit from credit card rewards, Regeneron allegedly undermined fair competition in the market.

  3. Impact on Healthcare Spending: The lawsuit suggests that Regeneron's actions had significant implications for Medicare expenditure. The inflated prices and reduced competition allegedly drained Medicare resources, with the program spending over $25 billion on Eylea between 2012 and 2023. If found liable, Regeneron could face substantial financial penalties under the False Claims Act, potentially triple the amount of its losses, plus fines.

You Need to Talk to Your Patients About Money

By Neill Slater, MD - A non-compliant patient arrives at the emergency department (ED) for evaluation of high blood pressure. Why isn't she taking her medication? It costs $300 per month, and she can't afford it. Has she talked to her doctor about a less expensive alternative? No. Read Full Article…

VBA Article Summary

  1. Recognition of the Catch-22 Dilemma: Physicians often find themselves caught between wanting to provide the best care for their patients and acknowledging financial constraints. Patients may hesitate to inquire about cheaper treatment options, fearing they might offend the doctor, leading to a cycle of unspoken concerns. This dilemma, akin to a modern Catch-22 scenario, underscores the need for open dialogue on treatment costs.

  2. Addressing Systemic Barriers: Medical education traditionally emphasizes egalitarian treatment regardless of financial status, leading physicians to overlook discussions about costs. Ignorance about the financial aspects of healthcare, including medication prices and insurance intricacies, further compounds the problem. Bridging this knowledge gap requires a systemic shift in medical education and a proactive effort from providers to familiarize themselves with healthcare economics.

  3. Embracing Uncomfortable Conversations: To mitigate patients' financial burdens, physicians must overcome discomfort and initiate conversations about money. By educating themselves on medication costs, reassessing treatment protocols, and openly discussing affordability with patients, providers can foster trust, enhance treatment adherence, and reduce healthcare expenses without compromising quality care. These steps mark a crucial starting point in addressing the broader issue of healthcare affordability.

7 prior authorization updates

By Andrew Cass - From Point32Health announcing home health prior authorization cuts to a state's proposed gold carding program legislation failing, here are seven updates on prior authorization that Becker's has reported since March 21. Read Full Article…

VBA Article Summary

  1. CMS Issues Final 2025 Medicare Advantage and Part D Rule: The final 2025 Medicare Advantage and Part D rule, issued by CMS on April 4, introduces new standards for marketing, broker payments, and prior authorization, aiming to enhance efficiency and transparency in these processes.

  2. Epic's Payer Platform Integrates Cohere Health's AI-driven Prior Authorization Solutions: Epic's Payer Platform has expanded its offerings to incorporate Cohere Health's AI-driven prior authorization solutions, indicating a growing trend towards leveraging technology to streamline prior authorization processes in healthcare.

  3. Point32Health Updates Prior Authorization for Home Health Services: Point32Health, the parent company of Harvard Pilgrim Health Care and Tufts Health Plan, is in the process of updating prior authorization requirements for home health services as part of a broader review, reflecting ongoing efforts within the industry to reassess and improve prior authorization practices.

Care costs, risks are main concerns for Americans

By Julia M. Johnson - The Change Healthcare cybersecurity breach was among the most popular stories across SmartBrief health care and life sciences briefs in March, driving home the point that medical organizations can still be open to hacker attacks — and incur significant costs — in spite of their precautions. Read Full Article…

VBA Article Summary

  1. Healthcare System Vulnerabilities Exposed: The BlackCat ransomware attack on UnitedHealth Group's Change Healthcare unit unveiled critical vulnerabilities in the healthcare system. With a backlog of medical claims surpassing $14 billion, the attack disrupted payment and care authorization processes, particularly affecting community health centers serving vulnerable populations. The federal government's Office for Civil Rights has initiated an investigation into the breach, highlighting the unprecedented magnitude of the attack and the urgent need for enhanced cybersecurity measures in healthcare organizations.

  2. Debilitating Financial Impact on Americans: Survey data reveals that medical bill affordability remains a top financial concern for Americans, exacerbating financial burdens and leading to delayed or avoided medical care. Even individuals with health insurance face significant out-of-pocket costs, with disparities disproportionately affecting marginalized communities. The Biden administration's establishment of a federal task force underscores the seriousness of the issue, aiming to alleviate the financial strain imposed by healthcare costs through collaborative efforts across governmental agencies.

  3. Rising Medicare Spending and Access Challenges: The soaring demand for GLP-1 drugs, despite their high list prices, has led to a substantial increase in Medicare spending. However, access to these medications remains challenging for many patients due to shortages and high demand. While Medicare currently covers these drugs for certain medical indications, negotiations for their pricing and broader coverage are anticipated, potentially mitigating financial barriers for patients.

Chronic Pain Linked to Accelerated Brain Aging

By Megan Brooks - The consequences of chronic musculoskeletal pain (CMP) may extend well beyond physical discomfort, potentially leading to faster aging of the brain, new research showed. Read Full Article…

VBA Article Summary

  1. Accelerated Brain Aging in Knee Osteoarthritis (KOA) Patients: Structural MRI data from over 9000 adults with KOA revealed a significant acceleration in brain aging compared to healthy individuals. This accelerated aging, particularly affecting the hippocampus and orbitofrontal cortex, correlated with memory decline and increased dementia risk during follow-up, suggesting a neural marker for early detection and intervention.

  2. Genetic Factor Implication: Researchers identified the SLC39A8 gene, highly expressed in glial cells, as a potential genetic factor contributing to accelerated brain aging in KOA patients. Understanding genetic influences on brain aging could offer insights into targeted interventions to slow down cognitive decline associated with chronic musculoskeletal pain.

  3. Implications for Treatment and Prevention: The study underscores the importance of proactive measures to mitigate the impact of chronic musculoskeletal pain on brain health. While inflammation likely plays a role in both joint deterioration and brain aging, lifestyle interventions such as regular exercise and a healthy diet may help reduce the risk of cognitive decline. This research highlights the potential for personalized treatments targeting both pain management and brain health to improve outcomes for individuals with KOA.

A Second Gang Shakes Down UnitedHealth Group for Ransom

By Marianne Kolbasuk McGee - As if things weren't messy enough in the Change Healthcare attack, a second cybercriminal gang - RansomHub - is trying to shake down the company's parent, UnitedHealth Group, and have it pay another ransom for data that an affiliate of ransomware-as-a-service group BlackCat claims to have stolen in February. Read Full Article…

VBA Article Summary

  1. RansomHub Threatens to Sell Stolen Data: In the aftermath of the Change Healthcare attack, threat intelligence firm SOCRadar reports that RansomHub is threatening to auction off 4 terabytes of highly sensitive data to the highest bidder. This data includes information on millions of active U.S. military and Navy personnel, medical records, payment details, patient Social Security numbers, insurance records, and more.

  2. Disrupted Cybercriminal Networks and Allegations of Scams: The incident sheds light on the complexities of cybercriminal networks and the risks associated with paying ransoms. Despite UnitedHealth Group's reported $22 million ransom payment to BlackCat, an affiliate claims they were stiffed out of their share. The subsequent closure of BlackCat's data leak site, allegedly due to law enforcement action, raises suspicions of an exit scam. RansomHub's emergence further complicates the situation, with speculation ranging from a scammed affiliate seeking payment to a potential rebranding of BlackCat.

  3. Geopolitical Implications and Ongoing Recovery Efforts: The saga highlights geopolitical implications, with RansomHub's restriction on targeting certain nations hinting at potential ties to Russian interests. Meanwhile, UnitedHealth Group and Change Healthcare continue their efforts to restore IT services amidst a barrage of proposed class action lawsuits. As law enforcement intensifies counter-ransomware efforts, the incident underscores the need for robust cybersecurity measures and vigilance in dealing with evolving cyber threats.