Court Addresses Allegations That Health Plan Participants Sold Their Data for Fraudulent Coverage

By Elizabeth Hopkins and Emily Payson - There’s a lot happening with healthcare right now. This week’s notable decision touches on several issues worth paying attention to, including healthcare data mining, “junk” health insurance plans, and health plan marketing practices. Read Full Article…

VBA Article Summary

1. Complex Litigation and Business Relationships: The case involves multiple parties, including Quick Health, a healthcare enrollment center/insurance broker, Data Marketing Partnership, a data-mining company, Providence Plans, a group of healthcare plans, and their administrators and sponsors. Initially, these entities collaborated to market group health plans, but disputes arose when customers became dissatisfied with their insurance coverage, leading to litigation. Quick Health claims that other defendants unfairly blamed it for the arrangement's failure and seeks to recover financial losses.

2. Unique Business Model and Legal Issues: Data Marketing Partnership's distinctive business model involved offering lower-cost health insurance in exchange for tracking users' internet and cellphone data. This data was then sold to marketing firms and group health insurance plans. The legal complications in the case include state law claims by Quick Health against the defendants, including breach of implied contract, promissory estoppel, defamation, and commercial disparagement. The defendants argued that Quick Health's claims were preempted by ERISA and that the court lacked jurisdiction over Data Marketing Partnership.

3. Court's Decision and ERISA Implications: The court dismissed some claims but left others intact, indicating that Quick Health could proceed with certain allegations. The case also delved into ERISA preemption issues, with a related case indicating that the plans might be governed by ERISA, affecting the regulatory oversight and legal strategy of the parties involved. The ongoing legal proceedings highlight the complex interplay between state laws, business practices, and federal regulations like ERISA in the healthcare and insurance sectors.

Fiduciary rule to take effect Sept. 23, setting stage for major changes, legal battle

By John Hilton - Department of Labor officials ushered in what is sure to be a fierce, and lengthy, legal battle today with a preview of its long-awaited, and industry despised, Retirement Security Rule. Read Full Article…

VBA Article Summary

1. Introduction of the RSR: The Regulation on Sales of Retirement Investments (RSR), set to be published in the Federal Register, will implement a fiduciary standard on nearly all sales of life insurance and annuities, aiming to enhance consumer protection. Expected to take effect on Sept. 23, it's poised to overhaul the commission-based sales process, banning certain compensation practices and requiring new compliance structures.

2. Implications and Skepticism: The RSR faces skepticism from industry representatives who argue that extending fiduciary status to insurance producers could limit access to financial guidance and retirement products. Wayne Chopus of the Insured Retirement Institute warns of potential negative outcomes, citing past experiences with similar regulations, indicating a looming battle over its efficacy and impact.

3. Legal Challenges and Future Outlook: Despite its anticipated rollout, the RSR's fate remains uncertain pending potential court challenges. Drawing comparisons to a previous fiduciary rule overturned by the Fifth Circuit in 2018, the DOL insists that the RSR is distinct and aims to clarify standards for trusted financial advice. However, industry associations are expected to contest its legality, setting the stage for a legal showdown over the interpretation of fiduciary duties and consumer protections.

Change Healthcare data reportedly listed for sale — then delisted

By Paige Minemyer - About a week ago, cybersecurity experts identified posts from the criminal group RansomHub that suggested the data from the Change Healthcare hack was up for sale. Read Full Article…

VBA Article Summary

1. Ransomware Attack and Ransom Payment: In February, hackers breached the systems of Change Healthcare, a subsidiary of UnitedHealth Group. Subsequently, UnitedHealth confirmed that it paid a $22 million ransom in Bitcoin to the BlackCat hacking group to secure the data and restore their systems. Payment logs confirmed by analysts indicate the transaction amount and the involvement of the BlackCat group, which operates under the alias ALPHV.

2. Internal Dispute and Data Leakage: Following the ransom payment, internal conflicts within the BlackCat group led to the core members absconding with the ransom, depriving the affiliate who executed the hack of their share. This affiliate still possessed the stolen data and later partnered with another cybercriminal group, RansomHub, in an attempt to extort further ransom from UnitedHealth Group by threatening to sell the stolen patient data.

3. Ongoing Cybersecurity and Legal Responses: As the situation developed, RansomHub claimed possession of the data and threatened additional leaks if their demands were not met. This prompted responses from various sectors including legal, cybersecurity, and governmental. For instance, the State Department announced a reward up to $10 million for information on individuals associated with BlackCat, and U.S. Senator Mark Warner introduced legislation aimed at improving cybersecurity in healthcare in response to the breach. Meanwhile, UnitedHealth Group has been working to restore services affected by the cyberattack and address the broader implications for patient data security and healthcare service continuity.

Hospitals slam FTC's noncompete ban

By Alan Condon - The Federal Trade Commission on April 23 voted 3-2 to ban noncompete agreements in a move it estimates will save up to $194 billion in healthcare costs over the next decade. Read Full Article…

VBA Article Summary

1. FTC's Jurisdiction and Impact on Hospitals: The FTC acknowledged its jurisdiction limitations over nonprofit entities but reserved the right to assess an entity's nonprofit status. This could affect a significant portion of U.S. hospitals, including those claiming tax-exempt status and state or local government hospitals. The final rule, described as a "double whammy" by the Federation of American Hospitals, imposes challenges on hospitals, making caregiver recruitment and retention more difficult and creating an anticompetitive environment between taxpaying and tax-exempt hospitals.

2. Noncompete Ban and Economic Impact: The FTC's ban on noncompete clauses, affecting approximately 18% of the U.S. workforce and a significant portion of physicians, is expected to drive innovation and entrepreneurial activity. Projections indicate an estimated annual increase of 17,000 to 29,000 patents and a 2.7% growth in new businesses per year in the U.S. economy overall. Additionally, workers are anticipated to see higher earnings, with an average increase of $524 annually.

3. Industry Reaction and Legal Challenges: The American Hospital Association (AHA) urged the FTC to withdraw the noncompete ban or exempt the hospital field, citing staffing shortages and adverse impacts on healthcare markets. The AHA criticized the FTC's sweeping rule and questioned its constitutional authority, with expectations that courts and organizations like the U.S. Chamber of Commerce will challenge the rule.

Collaboration Now: Maximizing AI’s Potential in the Industry it Matters Most

By Itai Rechnitz - Since generative AI came on the scene, it’s been racing ahead at a steady clip and making its mark on every industry. Adoption of AI-based technologies tends to happen at lightning speed – for instance, ChatGPT (which now boasts over 180.5 million users) acquired 1 million users within 5 days of its launch, a milestone that Netflix took 3.5 years to reach. Read Full Article…

VBA Article Summary

1. Ethical Implementation: Collaboration fosters ethical decision-making in AI healthcare applications, exemplified by initiatives like AI-READI. These efforts establish standards and guidelines for responsible AI use, promoting transparency and accountability to uphold patient trust.

2. Bias Mitigation: Through collaborative efforts, biases in AI algorithms within healthcare contexts are being addressed. Initiatives like those at Stanford University engage stakeholders to create inclusive AI solutions, employing techniques such as algorithmic auditing and data augmentation to ensure fair outcomes across diverse demographic groups.

3. Enhanced Access and Privacy: Collaborative AI initiatives, such as AI4Lungs and the U.S. AI Safety Institute, work towards bridging healthcare disparities and safeguarding patient data. By pooling expertise, these efforts develop innovative solutions to improve healthcare access and establish robust frameworks for data protection, fostering trust among patients and healthcare providers alike.

UnitedHealth Data Leak May Affect ‘Substantial’ Swath of US

By John Toro - UnitedHealth Group Inc. found files containing private information on a vast number of Americans whose data may have been compromised in a February cyberattack that upended the US health system. Read Full Article…

VBA Article Summary

1. Extent of the Breach and Data Involved: The breach at Change Healthcare, a unit of UnitedHealth, exposed personal and health information that could potentially affect a substantial portion of the U.S. population. This makes it one of the largest health-care data breaches on record. The company previously managed $2 trillion in health claims and 15 billion transactions annually.

2. Company's Response and Ongoing Investigations: In response to the breach, UnitedHealth established a website and call center to aid affected individuals with credit monitoring. Despite this, the Department of Health and Human Services (HHS) has started an investigation as UnitedHealth, Change Healthcare, and other involved entities failed to notify the HHS within the required 60-day period under health privacy regulations.

3. Financial and Operational Repercussions: The aftermath of the attack has been costly for UnitedHealth, potentially reducing its earnings by up to $1.6 billion this year, mostly in one-time costs. Operational disruptions continue, affecting cash flow for doctors and hospitals. Additionally, the company paid a ransom as part of its efforts to secure patient data, although specific details of the ransom were not disclosed.

FTC Chief Says Tech Advancements Risk Health Care Price Fixing

By Julie Rovner and David Hilzenrath - New technologies are making it easier for companies to fix prices and discriminate against individual consumers, the Biden administration’s top consumer watchdog said Tuesday. Read Full Article…

VBA Article Summary

1. Algorithmic Price Fixing: Khan highlights the emerging challenge of companies using algorithms to fix prices without explicit coordination, which presents a new hurdle for regulators. This phenomenon potentially eliminates competition and leads to higher prices for consumers, with Khan emphasizing that such practices are illegal under antitrust laws, regardless of the method used to achieve them.

2. Technological Scrutiny: The Federal Trade Commission (FTC) is adapting its approach to monitor and regulate technological advances in pricing strategies, particularly in the healthcare industry. Khan underscores the significance of understanding and addressing algorithmic pricing and the use of artificial intelligence to set individualized prices based on consumer behavior data.

3. Changing Landscape in Healthcare: Khan discusses shifts in the healthcare sector, such as increased consolidation and vertical integration among healthcare entities. This evolution prompts the FTC to reevaluate its strategies, focusing on preventing practices that could harm consumers, such as higher prices, reduced service quality, and adverse conditions for healthcare workers. Additionally, the FTC's recent ban on "noncompete" clauses in the healthcare industry, aimed at enhancing worker mobility and patient care, underscores the agency's commitment to addressing industry-specific challenges.

Starter 401(k) plans under SECURE 2.0: Helping small employers fast-track a retirement plan

By Lisa A. Tavares and Carol V. Calhoun - In 2022, almost half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF).  The situation is particularly acute with employees of small employers, which may not offer retirement plans at all. Read Full Article…

VBA Article Summary

1. Barrier Reduction: Starter 401(k) Plans aim to eliminate hurdles for employers, particularly small businesses, in establishing retirement plans. By simplifying administrative requirements and cost structures, they encourage wider adoption of retirement plans among employers.

2. Automatic Enrollment: All eligible employees are automatically enrolled in Starter 401(k) Plans, with deferral percentages ranging from 3% to 15% of compensation, unless they opt out or choose a different contribution level. This automatic enrollment significantly boosts employee participation, as experience has shown.

3. Flexibility and Access: Unlike some earlier retirement plan options, Starter 401(k) Plans are not restricted to small employers. They can be adopted by businesses of any size. While maintaining certain regulatory restrictions, such as prohibiting employer contributions, these plans offer simplicity, cost-effectiveness, and the ability to merge into regular 401(k) plans when necessary, making them attractive options for many employers.

Which Probiotics Are Effective in Irritable Bowel Syndrome?

By Molly Gamble - Irritable bowel syndrome (IBS) is a common brain-gut axis disorder, and patients are often dissatisfied with conventional treatments. The role of the microbiota in IBS is now well established, and patients frequently take probiotics on their own initiative or on the advice of a physician or pharmacist. Read Full Article…

VBA Article Summary

1. Role of Probiotics in IBS Management: Despite the American College of Gastroenterology's reservations, Dr. Jean-Marc Sabaté underscores the rationale behind prescribing probiotics for irritable bowel syndrome (IBS), emphasizing the significant role of the microbiota in this condition. With patients often enduring years of therapeutic trials, including probiotics, the prevalence of probiotic use among IBS patients in France highlights their perceived value in managing symptoms.

2. Microbiota Dynamics in IBS: Studies employing molecular techniques confirm disparities in intestinal flora between IBS patients and healthy individuals, with variations even among patient subtypes. Dysbiosis, characterized by alterations in microbiota composition, interacts with various mechanisms underlying IBS, such as changes in intestinal motility, immune activation, and bile acid regulation. Understanding these dynamics provides insights into potential therapeutic targets, including probiotics.

3. Evidence-Based Probiotic Recommendations: Dr. Sabaté advocates for evidence-based probiotic selection, emphasizing the importance of clinical efficacy demonstrated in randomized placebo-controlled trials. Highlighting specific strains like Bifidobacterium bifidum MIMBb75 and Lactobacillus plantarum 299v, supported by robust evidence for alleviating IBS symptoms, he emphasizes the need for targeted probiotic interventions tailored to individual patient needs and symptomatology.

ACA Plans Are Being Switched Without Enrollees’ OK

By Julie Appleby - Some consumers covered by Affordable Care Act insurance plans are being switched from one plan to another without their express permission, potentially leaving them unable to see their doctors or fill prescriptions. Some face large IRS bills for back taxes. Read Full Article…

VBA Article Summary

1. Vulnerability of Federal Marketplace Accounts: Unauthorized enrollment and plan-switching pose a significant challenge to the Affordable Care Act (ACA), particularly in the 32 states served by the federal marketplace. Rogue agents exploit the relatively lax security measures, gaining access to policyholder accounts with just a name, date of birth, and state information. This contrasts with state-run ACA markets, which often require additional authentication, highlighting the need for enhanced security protocols.

2. Impact on Consumers and Brokers: The surge in unauthorized plan-switching not only affects consumers but also brokers who lose commissions when clients are switched without consent. Consumers may find themselves enrolled in plans they didn't choose, leading to tax burdens and potential disruptions in healthcare access. Brokers lament the loss of client trust and emphasize the fraudulent nature of such actions, which can result in financial and health-related consequences for individuals.

3. Regulatory Responses and Safeguard Implementation: Federal regulators acknowledge the problem and have initiated measures to address it, including technical efforts to resolve complaints and stricter rules requiring explicit consent for plan changes. However, the effectiveness of these measures remains uncertain. Meanwhile, states with their own marketplaces have been more successful in preventing unauthorized switching by implementing additional security measures. Balancing accessibility with security remains a challenge for federal regulators, who aim to prevent fraudulent activities while ensuring smooth enrollment processes.