Daily Industry Report - April 9

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)

Rising Complaints of Unauthorized Obamacare Plan-Switching and Sign-Ups Trigger Concern

By Julie Appleby - Federal and state regulators aren’t doing enough to stop the growing problem of rogue health insurance brokers making unauthorized policy switches for Affordable Care Act policyholders, say consumers, agents, nonprofit enrollee assistance groups, and other insurance experts. Read Full Article…

VBA Article Summary

  1. Unauthorized Policy Switching and Its Consequences: A significant issue highlighted involves licensed brokers gaining easy access to healthcare.gov policyholder information, leading to unauthorized switches of individuals' healthcare plans. This malpractice not only results in commissions for unscrupulous agents but also leaves many switched policyholders with plans that do not cover their regular doctors or medications, potentially leading to higher deductibles and back taxes due to misrepresented income or eligibility for premium tax credits.

  2. Efforts to Address the Issue: Federal and state regulators are aware of the unauthorized switching issue, with measures being discussed and implemented to prevent such activities. This includes CMS' prohibition against enrolling people or changing plans without consent and collaborations with state regulators and large broker agencies to eliminate fraudulent activity. Despite these efforts, challenges remain in identifying and punishing bad actors, with CMS not providing a comprehensive count of sanctioned agents or brokers.

  3. Impact on Consumers and Regulatory Challenges: The unauthorized plan switching predominantly targets low-income consumers, exploiting loopholes in rules designed to facilitate access to healthcare coverage. The problem's persistence is exacerbated by the administrative and investigative complexities involving multiple state and federal agencies, which can delay or hinder the resolution process. Proposals for improvement include creating centralized complaint portals and enhancing healthcare.gov's security measures to prevent unauthorized access and activity.

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BREAKING!: Second Ransomware Attack on Change Healthcare

By Owen Scott Muir, M.D. - There has been another ransom attack on United Healthcare's Optum Subdivision monstrously large and interconnected—and now repeatedly ransomware attacked—Change Healthcare. Read Full Article…

VBA Article Summary

  1. Recurrent Cybersecurity Breach Targets Change Healthcare Again: The article discusses a recurring issue where American Healthcare, particularly Change Healthcare, has been compromised again by a cyberattack, allegedly by a group of Russian-speaking hackers. Despite claims of resolution, the situation remains unresolved, and this second attack has resulted in the theft of 4 TB of sensitive data, including personally identifiable information of U.S. military personnel, medical records, and payment information.

  2. RansomHub Demands Ransom, Threatens Sale of Stolen Healthcare Data: The group behind this latest cyberattack, named RansomHub—a name mocking early 2000s tech company naming conventions—has taken responsibility and is demanding a ransom within 12 days to prevent the sale of the stolen data to the highest bidder. This group's approach underlines the persistent and evolving threat of cybercrime targeting healthcare infrastructure.

  3. Systemic Vulnerabilities and the Need for Regulatory Vigilance: The article reflects on the broader implications of such cyberattacks, highlighting a systemic vulnerability within American Healthcare's digital and financial practices. It criticizes UnitedHealth Group's financial incentives that may indirectly perpetuate these security breaches. Moreover, it stresses the potential for more significant regulatory interventions by the Department of Justice (DOJ) and warns of the ongoing risk to personal health information security, urging readiness for further incidents.

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!

CMS caps broker payments in Medicare Advantage

By Rebecca Pifer - The 1,327-page rule aims to stop brokers from steering beneficiaries to certain plans in exchange for higher reimbursement from insurers, while giving them more predictable compensation, the CMS said in a fact sheet on the rule. Read Full Article…

VBA Article Summary

  1. Introduction of Broker Compensation Caps: The Biden administration has implemented a cap on the compensation that Medicare Advantage (MA) plans can offer to brokers. This move is aimed at addressing predatory marketing practices. By broadening the definition of compensation to encompass all actions related to the sale or enrollment of a beneficiary in an MA plan, the rule prevents insurers from offering brokers additional fees beyond the government-mandated cap. This change is set to take effect starting with the upcoming annual enrollment period this fall.

  2. Increase in Fixed Compensation for Brokers: Alongside the cap, the rule introduces a $100 increase in the fixed compensation amount for brokers enrolling beneficiaries in plans. This adjustment is significantly above the $31 increase initially proposed and is seen as a measure to curb the excesses without unduly penalizing brokers. It addresses concerns about financial incentives that lead brokers to preferentially steer beneficiaries to plans that may not best meet their needs, with the broader goal of fostering a more equitable and transparent marketplace for Medicare beneficiaries.

  3. Enhancements and Prohibitions to Tackle Misconduct and Improve Transparency: The rule enacts several other provisions aimed at curbing marketing misconduct and enhancing the quality of information available to beneficiaries. It prohibits contracts that incentivize enrollment based on volume and restricts the sharing of beneficiary information without written consent. These measures are part of a broader effort to ensure that the substantial taxpayer funds allocated to MA plans are used responsibly and to promote health equity by requiring MA plans to annually review their policies for care denials or delays affecting disabled or low-income enrollees.

Change asks to consolidate dozens of cyberattack class-action lawsuits

By Emily Olsen - Lawsuits are piling up against Change as the technology company works to bring all of its systems back online following a cyberattack in late February. Read Full Article…

VBA Article Summary

  1. Consolidation Request by Change Healthcare: Change Healthcare, a subsidiary of UnitedHealth Group, has requested to consolidate 24 class-action lawsuits it is facing due to a cyberattack that disrupted industry operations. The company seeks to centralize these lawsuits in the federal U.S. District Court for the Middle District of Tennessee, arguing that the cases share factual and legal claims and are in the early stages of litigation. This consolidation aims to preserve court resources and prevent inconsistent rulings and duplicative work.

  2. Nature of the Lawsuits: The cyberattack has resulted in two dozen class-action lawsuits as of April 2, with 13 filed by consumers concerned about data theft and 11 by providers who have faced issues receiving payments due to Change's systems being offline. Change Healthcare contests the lawsuits, arguing against the theory that its security measures were inadequate and stating that plaintiffs must prove they were harmed by the attack. Without centralization, these lawsuits could proceed in at least seven different districts across the country.

  3. Rationale for Choosing Tennessee: Change Healthcare proposes the Middle District of Tennessee as the venue for the consolidated case, emphasizing that the majority of the suits have already been filed there. The company, which was acquired by UnitedHealth in 2022, is at the center of all lawsuits, including those naming other entities like UnitedHealth or its health services arm, Optum. The suggested court and likely judge are deemed well-equipped to handle the case, amid a backdrop of significantly increasing data breach class actions in the healthcare sector, as reported by law firm Duane Morris.

Indy Explains: Why are state employees' and retirees’ health insurance premiums rising?

By Tabitha Mueller - Rising health care and pharmacy costs mean current and retired state employees will face health insurance rate hikes ranging from 8 percent to 25 percent beginning July 1, leading to monthly premium increases of $8 to $53 depending on the number of dependents and the plan type. Read Full Article…

VBA Article Summary

  1. Approval of Premium Increases Mitigated by Reserve Funds: The Public Employees’ Benefits Program (PEBP) Board decided to use approximately $7.3 million from the agency’s catastrophic reserve fund to reduce the initially proposed significant monthly premium increases for health and life insurance. Initially, monthly premiums were set to rise between 15% and over 50% for the program's 70,000 participants, but the subsidy helps to alleviate the impact on employees and retirees. PEBP Executive Officer Celestena Glover highlighted that while premium increases are unavoidable, this measure would help soften the financial impact on members.

  2. Concerns Over State Worker Compensation and Staff Shortages: Despite Gov. Joe Lombardo signing a bill for substantial state employee pay raises, there's concern that the increased insurance costs could negate these adjustments, particularly affecting lower-salaried workers. The premium hikes raise alarms about exacerbating the state worker shortage, already at a 25% vacancy rate across executive branch agencies. Public comments emphasized the challenge of retaining and hiring quality staff due to high premiums, urging PEBP to reconsider the rate increases to maintain competitive health benefits and address understaffing issues.

  3. Financial Details and Future Outlook: The rate increases are a response to several factors, including lower than expected state subsidies due to decreased enrollment, increased medical benefit usage, and high claims costs. While PEBP mitigated the increases by utilizing its reserve fund, concerns about budget shortfalls remain, with past instances of the state allocating less funding than requested. The adjustments will result in monthly premium increases ranging from $8 to $53 starting July 1, 2024, depending on the plan choice and tier. Coverage under the plans will remain the same, with PEBP implementing programs for specific surgeries and cancer treatments at Centers of Excellence to fully cover certain services without out-of-pocket costs.

Report: Gap Widens in Patient Perceptions of Inpatient vs. Outpatient Safety

By David Raths - While patient perceptions in outpatient settings are rising, nearly half of all staff and almost one-third of inpatients report low perceptions of safety, according to Press Ganey data. Reports of violence against nurses are also rising. Read Full Article…

VBA Article Summary

  1. Widening Gap in Patient Safety Perceptions: The report reveals a significant disparity in patient safety perceptions between inpatient and outpatient settings, now 2.5 times wider than before the pandemic. While 81.9% of patients in medical practices and ambulatory settings felt substantially safer in 2023 compared to 78.1% pre-pandemic, only 68.5% of hospital patients felt "very safe" in 2023, marking a 5.1% decline.

  2. Improvements and Challenges in Workplace Safety Culture: There's a slight increase in workplace safety culture, with employee views on safety within their organization rising by 1.2% over the last two years. This includes an increased belief in adequate unit staffing and a culture where mistakes can be reported without fear. However, a significant gap persists between how senior management and nurses perceive safety culture, and nearly half of the employees still report low perceptions of safety culture. Additionally, reported assaults against nursing personnel have increased by 5% year over year.

  3. Safety Outcomes and Employee Engagement Trends: The report notes continuous momentum in safety outcomes, with significant improvements in CAUTI, VAE, CLABSI, and HAPI, indicating progress towards better safety measures. On another positive note, national employee engagement has seen an uptick for the first time since the pandemic, with nearly half of all healthcare roles, including physicians and nurses, showing improvements in engagement. Despite these gains, high turnover rates continue, particularly among newer employees and nursing roles, with one-third of the workforce still not engaged, presenting ongoing challenges for retention.

Physicians ask FDA to revoke approval of DNA test for opioid addiction

By Nick Paul Taylor - AvertD detects 15 single nucleotide polymorphisms (SNPs) to show if a person may have an elevated risk of opioid use disorder (OUD). An FDA advisory committee voted overwhelmingly against an earlier version of the test in October 2022. Read Full Article…

VBA Article Summary

  1. Call for FDA to Revoke Approval of Controversial Opioid Addiction Test: Physicians from the group Physicians for Responsible Opioid Prescribing (PROP) have called for the FDA to revoke its approval of Autogenomics' AvertD genetic test for opioid addiction, citing concerns over the test's validity and potential for harm. PROP argues the test is based on outdated genetic studies and could lead to overprescribing opioids or unwarranted discrimination against individuals falsely identified as prone to opioid use disorder.

  2. PROP Urges CMS to Deny Coverage, Citing Flawed Predictive Value of AvertD Test: PROP also reached out to the Centers for Medicare & Medicaid Services (CMS), asking it to deny coverage for the AvertD test, reinforcing their stance with evidence that the test's approach to predicting opioid use disorder (OUD) is fundamentally flawed. Their concerns are backed by research indicating that current genetic markers and machine learning algorithms fail to predict OUD accurately, particularly when controlling for ancestry, leading to potential misclassification and treatment errors.

  3. FDA and Autogenomics Address Concerns, Emphasize Mitigation Efforts Post-Approval: Despite PROP's pushback and citing evidence of the test's shortcomings, the FDA had worked closely with Autogenomics to modify the AvertD test based on feedback before its approval. The FDA acknowledges the risks of false positives and negatives but believes these can be mitigated through proper labeling and healthcare provider education. Autogenomics, now known as SOLVD Health following its acquisition and name change, remains at the center of this controversy over the application of genetic testing in managing opioid addiction.

Trial shows Wegovy can ease heart failure symptoms

By Jonathan Gardner - People with obesity often develop diabetes and heart failure, a condition where the heart can’t pump as much blood as it should, if their weight gain can’t be reversed. Both diabetes and heart failure can also require expensive and long-term drug treatments, as well as result in costly hospital stays and other medical interventions. Read Full Article…

VBA Article Summary

  1. Wegovy Shows Promise for Heart and Obesity-Related Conditions: Novo Nordisk's Wegovy demonstrated beneficial effects on cardiovascular symptoms such as fatigue and breathlessness in individuals with obesity, diabetes, and heart failure, as revealed in clinical trial results presented at the American College of Cardiology conference. This builds upon previous findings showing symptom improvement in obesity and heart failure patients without diabetes, suggesting a broader potential for Wegovy's use.

  2. Clinical Trials Highlight Wegovy's Significant Health Benefits: The clinical trial involving 616 participants showed that those treated with Wegovy experienced a significant reduction in heart failure symptom scores and lost an average of 10% of their body weight over a year, compared to a 3% weight loss in the placebo group. These results, including improved walking distance and a better composite score of health measures, were deemed statistically significant and have been published in The New England Journal of Medicine.

  3. Competitive Landscape and Market Positioning of Wegovy vs. Zepbound: While Wegovy has been gaining ground, Eli Lilly's Zepbound emerges as a contender, boasting higher weight loss figures in clinical trials. However, Wegovy has secured an enhanced market position by demonstrating a reduction in cardiovascular events leading to expanded FDA approval and Medicare coverage. The results indicate that Wegovy not only aids in weight loss but also benefits heart failure patients, positioning Novo Nordisk strongly against competition and potentially influencing regulatory and insurance sector decisions.

Fast-tracked cancer drugs often fail to prove benefit

By Tina Reed - Less than half of the cancer drugs recently receiving accelerated approval from the Food and Drug Administration ultimately showed clinical benefit in trials after five years, a new JAMA study finds. Read Full Article…

VBA Article Summary

  1. Scrutiny Over FDA's Fast-Track Approval Process and its Impact on Cancer Drug Efficacy: The FDA's fast-track process for accelerated drug approvals, particularly for cancer drugs, is under increased scrutiny due to concerns about high prices and the reliance on preliminary evidence before completing trials. A significant portion of drugs approved through this pathway has failed to demonstrate substantial improvement in overall survival or quality of life, with 63% of drugs granted accelerated approval between 2013 and 2017 converting to regulatory approval, but only 43% showing real patient benefits.

  2. Study Highlights Risks and Delays in Confirming Efficacy of Accelerated Cancer Drug Approvals: A study presented at the American Association for Cancer Research Annual Meeting analyzed 129 accelerated drug approvals for cancer drugs from 2013 to 2023, revealing that drugs under accelerated approval were more likely to be withdrawn from the market quicker than in the past, with withdrawal times decreasing from 9.9 years post-approval to 3.6 years. Additionally, the time required to convert accelerated approval to full regulatory approval has increased, from 1.6 years to 3.6 years over the study period, indicating potential issues in confirming the efficacy of these drugs in a timely manner.

  3. Calls for Enhanced Regulatory Scrutiny and Improved Clinical Outcomes in Accelerated Drug Approvals: The study's authors advocate for improvements in the accelerated approval process to ensure decisions are based on high-quality clinical outcomes. They emphasize the importance of discussing the uncertainties of accelerated approval drugs with patients and call for increased regulatory scrutiny. In response to these findings, the FDA is considering implementing stricter trial requirements for drugs approved through the accelerated pathway, aiming to enhance the reliability and benefit of cancer treatments approved on this basis.

Fast Facts – Costs of Obesity

By Strategies to Overcome & Prevent (STOP) Obesity Alliance - Obesity is a complex chronic disease in which abnormal or excessive accumulation of body fat impairs health. Adult obesity rates have more than doubled since the 1980s — in the U.S. today, obesity affects over 42% of adults and 18% of youth. Read Full Article…

VBA Article Summary

  1. Individual and Societal Costs: Obesity is linked to significant economic burdens, both for individuals and society at large. Individuals with obesity face higher medical expenses compared to those without, driven primarily by the need to treat co-morbid conditions such as diabetes, cardiovascular disease, and osteoarthritis. These individuals also encounter non-medical costs including lost wages and increased disability and insurance claims, with direct medical costs being a larger burden for men and job-related costs impacting women more. Society faces substantial costs from obesity, with estimates of the annual medical costs in the U.S. ranging from $147 billion to nearly $210 billion, much of which is due to treating obesity-related diseases. Additionally, Medicaid spending is significantly higher for beneficiaries with severe obesity.

  2. Medical Costs Detailed: The most expensive health conditions linked to obesity include hypertension, type 2 diabetes, and chronic back pain, with costs amounting to hundreds of billions annually. In total, the direct and indirect medical costs related to obesity reached approximately $1.4 trillion in 2014, highlighting the financial impact of obesity-related health issues on the healthcare system.

  3. The Importance of Action: Without effective prevention, intervention, and treatment strategies for obesity, associated medical costs are expected to continue rising. Between 2001 and 2015, obesity-related medical expenditures increased by nearly 30%. Investing in obesity prevention and treatment, such as expanding Medicare coverage for obesity to include behavioral therapy and pharmacotherapy, could significantly reduce these costs, with potential savings estimated at $20 billion to $23 billion over ten years. This emphasizes the critical need for addressing obesity through comprehensive strategies to mitigate its financial impact on individuals and society.