Daily Industry Report - April 19

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)

3 takeaways on the new federal data privacy proposal after its first public showcase

By Emma Beavins - At the House Energy and Commerce’s data privacy hearing April 17, lawmakers discussed for the first time Chair Cathy McMorris Rodgers’ discussion draft of a new federal data privacy bill, the American Privacy Rights Act (APRA), since its reveal last week. Read Full Article…

VBA Article Summary

  1. Implications for Compliance: The proposed American Privacy Rights Act (APRA) would create a national data privacy framework, simplifying compliance for corporations and healthcare organizations. This would help align with state laws and existing federal regulations like HIPAA. Katherine Kuehn and Joe Jones highlighted that this legislation would make it easier for businesses to operate in the United States by reducing the complexity of adhering to diverse state laws.

  2. Bipartisan Support and Urgency: Lawmakers from both parties, including Subcommittee Chair Gus Bilirakis and Representative McMorris Rodgers, are united in their support for APRA, emphasizing the need for a national framework. They are committed to ensuring that a comprehensive data privacy law is passed this year, acknowledging the importance of minimizing data collection to protect consumer privacy.

  3. Need for Further Refinement: While APRA has bipartisan support, it is still considered a work in progress. Key issues raised include the need for stronger protections for children's data and the absence of a universal deletion mechanism for personal data, which was present in previous legislation. Witnesses and lawmakers like Frank Pallone and Jan Schakowsky advocate for further revisions to strengthen the bill before it becomes law.

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Federal agencies open online portal for reporting anticompetitive practices in healthcare

By Dave Muoio - Federal agencies want to hear from the public about monopolistic and anticompetitive behavior within the healthcare industry. Thursday, the Federal Trade Commission (FTC), the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) unveiled HealthyCompetition.gov, an online portal where anyone can submit a healthcare competition complaint for potential investigation. Read Full Article…

VBA Article Summary

  1. Collaborative Initiative for Healthcare Oversight: The FTC, DOJ, and HHS have launched a joint effort to ensure healthcare organizations maintain quality care standards and fair employee compensation. This collaborative approach aims to address concerns regarding monopolistic practices and unfair competition that hinder access to affordable healthcare, as highlighted by FTC Chair Lina Khan.

  2. Government Response to Corporate Greed: Prompted by White House directives, the interagency collaboration signifies a proactive stance against corporate greed in the healthcare sector. Through a multifaceted strategy involving public engagement, targeted leadership appointments, and enforcement actions, the government seeks to curb anti-competitive behaviors detrimental to consumers and workers alike.

  3. Portal for Reporting Violations: The establishment of a centralized portal enables individuals to report potential violations of antitrust laws and other relevant regulations governing the healthcare industry. Complaints undergo preliminary review by FTC and DOJ staff, with serious concerns leading to formal investigations. Confidentiality measures are in place to protect whistleblowers, emphasizing the government's commitment to transparency and accountability in addressing harmful practices.

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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Drug shortages at highest since 2014: Chemo drugs, Wegovy, ADHD medications affected

By Anthony Robledo - Drug shortages have reached a record high in the first three months of 2024. In the first quarter of the year, 323 drugs were running low, surpassing the 2014 high of 320, according to data provided by the American Society of Health-System Pharmacists (ASHP) and the University of Utah Drug Information Service. Read Full Article…

VBA Article Summary

  1. Widespread Drug Shortages Across Various Medications: Since 2001, groups have monitored drug shortages through voluntary reports, which confirm that both essential and life-saving medications, including oxytocin, chemotherapy treatments, and ADHD drugs, are frequently in short supply. These shortages affect significant numbers of patients, with over half a million consumers impacted on average per shortage from 2016 to 2020, predominantly affecting older adults aged 65 to 85.

  2. Current Focus on Diabetes and Weight Loss Drug Shortages: There is a notable shortage of popular diabetes and anti-obesity drugs like Semaglutide, marketed as Wegovy and Ozempic, as highlighted by the Food and Drug Administration (FDA). This deficiency extends to various drug classes, particularly generic sterile injectables used in cancer treatment and emergency care.

  3. Federal Investigation into Drug Shortage Causes and Proposed Solutions: The Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS) are investigating potential causes of drug shortages, including the role of drug wholesalers and purchasing strategies that might discourage production. They are exploring various strategies to mitigate shortages, such as promoting diverse supply chains and increasing market transparency, although there are concerns about the feasibility of some proposed measures.

Employers Risk Facing Turnover Without Comprehensive Benefits Offerings

By Remy Samuels - If employers fail to offer a holistic suite of benefits that is target toward their particular plan demographics, and fail to effectively communicate these benefits, they risk facing retention issues down the line, according to a new survey conducted by Nuveen, a TIAA company. Read Full Article…

VBA Article Summary

  1. Employee Willingness to Change Jobs for Better Benefits: Nuveen's Benefits 2.0 report highlights that 70% of surveyed U.S. workers, particularly younger ones, would consider switching jobs to gain better benefits. This underscores the importance for companies to view employee benefits not just as a cost but as a strategic investment to gain competitive advantage.

  2. Diverse Needs Across Demographics: The report finds that one-size-fits-all benefits packages are ineffective, as different demographic groups have varied priorities. For instance, Gen Z workers prioritize education and training benefits, while older employees value retirement contributions and parental leave more highly. This diversity in needs calls for more tailored benefits packages that are inclusive and responsive to the workforce's preferences.

  3. Communication and Accessibility of Benefits: Nuveen notes a significant gap in how benefits are communicated and accessed within companies. Two-thirds of employees believe that there is room for improvement in communication about benefits. The report suggests enhancing benefit utilization through more accessible platforms and proactive outreach methods, including in-person discussions, seminars, and digital channels, to ensure employees fully understand and can access their benefits.

Lawmakers target mergers in first hearing on Change Healthcare hack

By Tina Reed - During the first congressional hearing on the Change Healthcare hack Tuesday, lawmakers appeared to zero in on the risks of massive consolidation in health care. Read Full Article…

VBA Article Summary

  1. Concerns Over Healthcare Consolidation: Lawmakers from both parties express worry about the consolidation of healthcare giants like UnitedHealth Group, suggesting it has led to a system that is less resilient and may not serve the best interests of patients.

  2. Implications of Cybersecurity Vulnerabilities: The recent cyberattack on Change Healthcare, a major medical claims processor, highlights vulnerabilities in the healthcare system. Lawmakers and experts emphasize the need for regulatory scrutiny over mergers and acquisitions, considering potential cybersecurity risks and the impact on system integrity.

  3. Accountability and Transparency: UnitedHealth's response to the attack raises questions about accountability and transparency. Lawmakers express frustration over the lack of communication and seek answers regarding the true impact of the attack, owed payments to providers, compromised data, and measures taken to prevent future incidents. UnitedHealth's upcoming testimony before the Senate Finance Committee is anticipated to shed further light on these issues.

CMS to Test Mandatory 5-Year Episode-Based Alternative Payment Model

By David Raths - People with Traditional Medicare who undergo surgery may experience fragmented care, which can lead to complications and prolonged recoveries.  To address this issue, and based on lessons learned from previous episode-based payment models, the CMS Innovation Center has proposed a new mandatory 5-year, episode-based alternative payment model that would launch in 2026. Read Full Article…

VBA Article Summary

  1. Introduction of TEAM Model: The Transforming Episode Accountability Model (TEAM) is proposed to enhance the patient experience from surgery to recovery, focusing on care coordination and transition between providers. It targets surgeries such as lower extremity joint replacement and coronary artery bypass graft, among others. Under TEAM, selected acute-care hospitals would be responsible for both the cost and quality of care from surgery through the first 30 days post-discharge.

  2. Participation and Risk Management: TEAM would mandate participation for hospitals in certain U.S. geographic regions, featuring three tracks with varying levels of risk and reward. Track 1 offers no downside risk initially, while Track 3 poses higher risks and rewards. This phased approach aims to ease hospitals into the financial risks associated with the model.

  3. Stakeholder Responses and Concerns: There has been reluctance from provider organizations toward mandatory participation in such models. The American Hospital Association highlighted concerns regarding the financial sustainability and the potential negative impact on patient care due to mandatory participation. Other stakeholders, like Premier, advocate for incorporating voluntary participation and key design principles to ensure the model meets its objectives of improving care and reducing costs.

Were COVID-19 Vaccines to Blame for Infertility? Heart Attacks? A New Report Weighs In

By Cecelia Smith-Schoenwalder - The Moderna and Pfizer COVID-19 vaccines can cause myocarditis but evidence suggests they don’t cause infertility, Guillain-Barré syndrome or Bell’s palsy, according to a new report. Read Full Article…

VBA Article Summary

  1. Rare Incidences of Myocarditis and Pericarditis: The report acknowledges rare cases of myocarditis and pericarditis following administration of the Moderna and Pfizer COVID-19 vaccines, particularly among young males post their second dose. However, most patients exhibit a positive response to medication and recover swiftly.

  2. Absence of Evidence for Common Vaccine Skepticism Concerns: Evidence reviewed by the committee suggests that the Moderna and Pfizer COVID-19 vaccines do not cause Guillain-Barré syndrome, infertility, Bell's palsy, thrombosis with thrombocytopenia syndrome (TTS), or heart attacks. This counters prevalent concerns that fueled vaccine skepticism during the pandemic.

  3. Inconclusive Findings and Limited Data: Despite extensive global efforts, the report highlights insufficient evidence to definitively establish or refute causal links between COVID-19 vaccines and several potential harms, including chronic headache, tinnitus, capillary leak syndrome, and sudden death. Additionally, limited data on the Johnson & Johnson vaccine complicates the assessment, although evidence suggests a potential association with TTS and Guillain-Barré syndrome.

Why Establish a Fiduciary Committee for Welfare Benefit Plans?

By Cynthia Moore and Dickinson Wright - Many plan sponsors have read about the lawsuit filed against Johnson & Johnson alleging that it breached its fiduciary duties with regard to the prescription drug component of its group health plan, causing participants to “overpay” for their prescriptions. Read Full Article…

VBA Article Summary

  1. Anticipated Legal Trend: The lawsuit filed by Lewandowski against Johnson & Johnson marks a significant development following the enhanced disclosure and transparency provisions introduced by the Consolidated Appropriations Act of 2021. Predicted by many observers, this type of lawsuit against a group health plan underscores the growing focus on fiduciary responsibilities under ERISA (Employee Retirement Income Security Act) and the Internal Revenue Code.

  2. Implications of Legal Action: Should Lewandowski's lawsuit proceed beyond a motion for summary judgment and result in a monetary settlement or damages recovery against the plan’s fiduciaries, it could trigger a cascade of similar lawsuits, akin to the proliferation seen in cases targeting retirement plan sponsors for alleged "excessive" fees. This highlights the potential financial and reputational risks facing plan sponsors and underscores the need for robust fiduciary compliance measures.

  3. Fiduciary Duty Obligations: ERISA's fiduciary duty rules, including those outlined in Section 404, apply not only to retirement plans but also to welfare benefit plans. Plan sponsors, whether maintaining fully insured or self-funded plans, are obligated to adhere to fiduciary standards encompassing prudent decision-making, exclusive benefit to participants, and plan document compliance. The establishment of a benefits committee emerges as a best practice to ensure diligent oversight, informed decision-making, and documented adherence to fiduciary responsibilities, ultimately mitigating legal risks and safeguarding participant interests.

AHA Urges Labor Department to Investigate MultiPlan’s ‘Unconscionable Practices’

By Katie Adams - Following a damning investigation from the New York Times, the American Hospital Association is calling for the U.S. Department of Labor to probe into the business practices of MultiPlan, a New York-based data analytics firm. Read Full Article…

VBA Article Summary

  1. Profitable Negotiation Strategies: MultiPlan employs negotiation tactics with major payers like UnitedHealthcare, Cigna, and Aetna to reduce reimbursements for out-of-network medical providers, resulting in billions of dollars in profits for both MultiPlan and its insurer clients. This strategy, while aimed at combatting overbilling, often leads to increased costs for patients and employers.

  2. Financial Incentives Driving Practices: MultiPlan and its payer partners have a financial stake in minimizing reimbursements for out-of-network medical services, as their fees increase when reimbursements decrease. This financial motivation drives them to negotiate considerably lower payment amounts, resulting in significant savings and fees for the companies involved, often at the expense of patients who face unexpectedly high bills.

  3. Calls for Government Oversight: The American Hospital Association (AHA) has called upon the Department of Labor to intervene, citing MultiPlan's "unconscionable practices" and distorted incentives. Despite regulatory bodies rarely intervening in such negotiations, the AHA urges immediate government investigation to hold companies like MultiPlan and its insurer partners accountable for their practices, which they argue negatively impact patients and healthcare affordability.

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 discrepancy between the brain age and chronological age of individuals, indicating accelerated brain aging in those with KOA compared to healthy individuals. This phenomenon was particularly pronounced in regions crucial for cognitive processing, such as the hippocampus and orbitofrontal cortex.

  2. Memory Decline and Dementia Risk Prediction: The accelerated brain aging observed in KOA patients correlated with longitudinal memory decline and an increased risk of developing dementia. This predictive marker provides valuable insights for early detection and intervention strategies, potentially offering avenues for mitigating cognitive decline in chronic musculoskeletal pain patients.

  3. Genetic and Lifestyle Factors: The study suggests a possible genetic factor, the SLC39A8 gene highly expressed in glial cells, contributing to the acceleration of brain aging in KOA patients. Moreover, lifestyle interventions such as proper exercise and healthy habits may play a crucial role in mitigating the risk of accelerated brain aging in chronic pain conditions, offering hope for future treatments and management strategies.