Cigna CEO promises ‘aggressive’ defense of pharmacy benefit managers

By Rebecca Pifer - Cigna’s CEO said the Connecticut-based healthcare company plans to go to the mat to defend PBMs, which have found themselves bearing the brunt of public blame for sky-high U.S. drug costs. Read Full Article…

HVBA Article Summary

1. Aggressive Defense of Express Scripts: Cigna's CEO, David Cordani, commits to more robustly defending its pharmacy benefit manager, Express Scripts, as it faces increasing scrutiny. Plans include intensified lobbying efforts in Washington, sponsoring research to highlight PBMs' value, and enhancing collaborations with independent pharmacists, who have been vocal critics of PBMs.

2. Strong Financial Performance: Cigna reported a significant increase in revenue and earnings for the second quarter, surpassing Wall Street expectations. The company's revenue rose to $60.5 billion, a 25% increase from the previous year, with net income up 6% at $1.5 billion. This growth is attributed primarily to the success of Evernorth, Cigna’s health services division that includes Express Scripts.

3. Future Growth Strategies: Amid ongoing criticism, Cigna is focusing on future growth through the adoption of biosimilars and GLP-1 medications. The company has also implemented a cost-sharing program to manage expenses for these high-cost medications, aiming to secure continued demand and growth for Evernorth. Additionally, Cigna plans to exit the Medicare market to focus more on its employer-sponsored insurance plans, which have shown more stability in utilization rates compared to Medicare Advantage.

Mark Cuban's big warning for employers

By Jakob Emerson - Mark Cuban is issuing a big warning to self-insured employers: If your company receives pharmacy rebates through employee benefits, prepare for an eventual lawsuit. Read Full Article…

HVBA Article Summary

1. Legal Responsibilities and Increased Transparency: The amendment of ERISA by the Consolidated Appropriations Act in 2021 has intensified the legal obligations of employers managing self-funded health plans. This includes the need for consultants and benefits brokers to disclose any direct or indirect compensation, enhancing transparency. However, unlike employers, these consultants and brokers are not required to prioritize the employers' interests, creating potential conflicts in healthcare service costs and plan management.

2. Recent Litigations Highlighting Cost Discrepancies: Prominent lawsuits, such as those against Wells Fargo and Johnson & Johnson, underscore the financial discrepancies faced by employees under employer-managed health plans. These cases highlight instances where employees were charged significantly higher prices for medications through their employer’s health plans compared to retail prices, suggesting a breach of fiduciary duty by not securing the lowest possible costs.

3. Employer Response and Strategy Adjustments: In response to rising legal pressures and the potential for large class action suits, some employers are beginning to take proactive steps to scrutinize the financial incentives of their consultants and third-party administrators. This involves demanding complete access to medical claims data and reassessing contracts to ensure they align with fiduciary responsibilities, aiming to mitigate risks and better protect themselves and their beneficiaries from inflated healthcare costs.

Health Claim Denial Appeal Rates Should be Higher, Experts Argue

By Paul Mulholland - The ERISA Advisory Council in a hearing earlier this month highlighted serious issues with the appeals process for health insurance claim denials that might not be widely appreciated by the sponsors of those plans. Read Full Article…

HVBA Article Summary

1. Complexity of the Appeals Process: During the advisory council's three-day hearing, experts described the process for appealing health plan claim denials as excessively complicated and not transparent. Many plan participants are unaware that they have the right to appeal, do not understand the appeal process, or lack confidence that their appeal would be considered seriously. This complexity discourages participants from engaging with the appeals system, leading to a very low number of appeals compared to the total number of denials.

2. Legal Standards and Practices in Appeals: Jeffrey Turner from the DOL’s Employee Benefits Security Administration clarified that the law mandates significant protections for claimants, including a minimum of 180 days to file an appeal and the requirement for a fair appeal process. Despite these protections, Meiram Bendat highlighted that insurers often disregard urgent status determinations made by healthcare providers and deny claims, particularly in outpatient settings, demonstrating a gap between legal standards and actual practice.

3. Recommendations for Policy Reforms: The hearings also touched on potential reforms, with Bendat recommending that the DOL should issue guidelines to ensure urgent care claims are not restricted to inpatient services and that claims should be automatically approved if not addressed within 72 hours. These recommendations aim to address systemic issues within the claims and appeals processes, making them more accessible and equitable for participants.

Updated: Eli Lilly’s tirzepatide reduces risk of heart failure outcomes in Phase 3 study

By Katherine Lewin - Eli Lilly has declared victory in the first late-stage trial testing tirzepatide’s effect on cardiovascular outcomes, as it looks to catch up with Novo Nordisk and solidify its lead over newer entrants to the GLP-1 race. Read Full Article…

HVBA Article Summary

1. Significant Clinical Outcomes: In Lilly's Phase 3 SUMMIT study involving 731 patients, the drug tirzepatide demonstrated a 38% reduction in heart failure outcomes compared to placebo. This includes urgent heart failure visits, hospitalizations, and cardiovascular deaths. The trial's success marks a pivotal extension of the GLP-1/GIP drug class beyond its initial uses in treating diabetes and weight loss, showcasing potential in cardiovascular and metabolic disorders.

2. Broadening Application of GLP-1 Drugs: The GLP-1/GIP class, represented by drugs like Lilly's Mounjaro and Novo Nordisk's Wegovy, is being explored for conditions beyond their original approvals. Lilly is investigating applications in metabolic dysfunction-associated steatohepatitis (MASH) and sleep apnea, while Wegovy has shown promise in reducing kidney disease progression risks. These developments indicate the versatile potential of this drug class in managing a spectrum of health conditions.

3. Future Prospects and Challenges: Lilly plans to present more data at upcoming medical meetings and aims to submit findings to the FDA and other regulatory bodies for further approvals. However, the company faces challenges like supply shortages, particularly with higher doses of tirzepatide, impacting drug accessibility. Despite these issues, Lilly is optimistic about expanding drug indications to enhance insurance coverage and patient access, reflecting a strategic approach to address unmet medical needs and improve health outcomes.

While Cigna Saddles Patients with Increasing Out-of-Pocket Requirements, the Company Bought Back $5 Billion of Its Own Stock

By Wendell Potter - Cigna, my former employer, disclosed this morning that during the first seven months of this year, it spent $5 billion of the money it took from its health plan and pharmacy benefit customers to buy back shares of its own stock, a gimmick that rewards shareholders at the expense of those customers. Read Full Article…

HVBA Article Summary

1. Revenue and Profit Increase: Cigna reported a significant revenue increase of 25%, reaching $60.5 billion in the second quarter of this year compared to the same period in 2023. Its profits also saw a rise, from $1.8 billion to $1.9 billion. This financial growth was partly due to aggressive cost management strategies, including increased premiums that led to a reduction in health plan enrollment by nearly half a million people, prioritizing profitability over customer retention.

2. Pharmacy Benefit Management Growth: Contrasting with the decline in health plan enrollment, Cigna's pharmacy benefit management (PBM) sector witnessed a robust 24% growth in customer numbers, bringing in nearly $50 billion in revenues. This growth underscores Cigna’s strategic shift towards dominating the pharmacy supply chain, a move that significantly contributes to its overall revenue, dwarfing the income from its health plans.

3. Legislative Challenges and Market Pressures: Amidst these financial successes, Cigna and other insurers face potential legislative changes driven by growing public and political pressure to reduce out-of-pocket costs for consumers. President Biden’s proposal to cap annual out-of-pocket expenses for prescription drugs at $2,000 could disrupt profit models for insurers like Cigna. The industry argues that such caps could lead to higher premiums, although critics suggest that insurers could maintain affordability by reducing stock buybacks and accepting lower profit margins instead of raising customer costs.

Loss of federal subsidies could mean big increases in Alabama health insurance costs

By Alander Rocha - As many as 371,000 Alabamians could see insurance costs increase if Congress doesn’t pass a law extending enhanced health insurance subsidies provided under the 2022 Inflation Reduction Act (IRA). Read Full Article…

HVBA Article Summary

1. Significant Impact of Subsidies: Since the introduction of the enhanced Affordable Care Act (ACA) subsidies under the 2021 American Rescue Plan Act (ARPA), and extended by the Inflation Reduction Act through 2025, over 386,000 Alabamians have enrolled in health insurance plans through the ACA marketplace. This represents a nearly 50% increase from the previous year. The subsidies have notably lowered the financial burden of health insurance, with 96% of enrollees in Alabama benefiting from them, making health coverage more accessible across various income levels.

2. Potential Consequences of Subsidy Expiration: The subsidies are set to expire at the end of 2025, which could lead to a significant increase in premiums. Without these subsidies, annual health insurance costs in Alabama could surge by an average of 93%, or $612 annually. This drastic increase could deter many from continuing their health insurance coverage, especially in a state that has not expanded Medicaid. This scenario is feared to potentially increase the number of uninsured individuals and exacerbate the healthcare access issues in the state.

3. Urgency for Policy Decisions: There is a pressing need for clarity regarding the future of these subsidies as insurance companies begin setting their rates for 2026 as early as summer 2025. Uncertainties about subsidy continuation could lead insurers to raise premiums preemptively, as seen in 2022. Stakeholders, including healthcare advocates and insurance providers, are pushing for decisions to be made by spring or summer of 2025 to avoid mispricing risks and ensure stable market conditions. This is critical not only for insurers but also for potential policyholders who rely on these subsidies to afford their health plans.

Wells Fargo Sued Over Mismanagement of Health Care Plan

By Remy Samuels - Wells Fargo & Company, including executives at the bank who were fiduciaries to the plan, have been accused in a lawsuit of breaching duties under ERISA by mismanaging the firm’s health plan in a way that caused employees to overpay for prescription drugs. Read Full Article…

HVBA Article Summary

1. Allegations of Overpricing: The lawsuit, filed by four former participants in the Wells Fargo ERISA plan, accuses Wells Fargo executives of agreeing to pay exorbitant prices for generic drugs, notably fingolimod. While these drugs are available at significantly lower prices at various retail pharmacies, the lawsuit claims the plan was charged nearly fifteen times more, leading to increased costs for both the plan and its participants.

2. Impact on Plan Participants: As a result of the alleged overpricing, the lawsuit highlights that the plan's participants face higher premiums and out-of-pocket costs. Specifically, for a 90-unit fingolimod prescription, the plan paid $6,694, with the participant covering $3,300 of the total $9,994.37 charge. This discrepancy is cited as evidence of a breach of fiduciary duty by the plan administrators.

3. Broader Implications and Legal Obligations: The lawsuit also explores the implications of Wells Fargo’s handling of its PBM, Express Scripts, including allegations of excessive administrative fees and forced use of higher-priced services. It raises questions about adherence to ERISA guidelines and the Consolidated Appropriations Act of 2021, which mandates that employers ensure fair pricing and conduct regular audits of vendors like PBMs.

Younger generations at increased risk for several cancer types

By Josh Friedman - Incidence rates for 17 different cancer types increased for successively younger generations in the United States during the past century. Individuals born around 1990 had two to three times higher incidence of small intestine, kidney and pancreatic cancers as those born around 1955. Read Full Article…

HVBA Article Summary

1. Rising Incidence of Cancer in Younger Generations: Hyuna Sung and colleagues' research highlights a significant increase in cancer incidence among younger generations compared to older cohorts. For example, the 1990 birth cohort exhibited markedly higher incidence rates of cancers such as small intestine, thyroid, kidney, and pancreatic cancers compared to the 1955 cohort. This trend suggests that younger individuals may be more frequently exposed to carcinogenic factors early in life, potentially due to lifestyle and environmental changes over recent decades.

2. Role of Obesity and Lifestyle in Cancer Risk: The study further reveals that many of the cancers with increasing rates among younger people, such as estrogen receptor-positive breast cancer and colorectal cancer, are associated with obesity. This underscores the crucial link between lifestyle choices, such as diet and physical activity, and cancer risk. The findings advocate for targeted health promotion efforts, particularly focusing on obesity prevention and healthy lifestyle education starting from a young age.

3. Preventive Strategies and Health Education: The implications of these findings are profound, prompting calls for enhanced public health strategies that focus on early-life interventions. Sung emphasizes the importance of investing in health education, improving built environments for physical activity, and reforming school food systems to promote healthier eating habits among children and adolescents. These measures aim to equip younger populations with the knowledge and resources needed to mitigate their cancer risk and improve overall long-term health outcomes.

HealthEquity breach may have affected 4.3M people

By Allison Bell - HealthEquity says a breach of a data repository outside of its core systems may have exposed the information of as many as 4.3 million people. Read Full Article…

HVBA Article Summary

1. Details of the Breach at HealthEquity: HealthEquity, a health account administrator based in Draper, Utah, detected a security breach on March 25, which was thoroughly investigated with the aid of forensic teams. By June 26, it was determined that the breach had compromised various types of personal information of plan and account users. The breached data repository included sensitive data such as social security numbers, health plan numbers, and prescription details, though transaction systems were unaffected.

2. Response and Measures Taken: In response to the breach, HealthEquity took swift action by shutting down compromised vendor accounts and blocking IP addresses linked to the attackers. All affected vendors were required to reset their passwords. The company has also committed to providing two years of identity monitoring services via Equifax and has taken steps to educate and support its partners and clients during the recovery process.

3. Broader Context and Implications: This incident at HealthEquity is part of a larger pattern of significant data breaches reported in the U.S., affecting potentially over a billion people in the first half of the year alone. The backdrop includes other major breaches such as the Cl0P ransomware attack and ongoing issues with the MOVEit system, highlighting the growing challenge of data security and the potential for repeated exposure of personal data across different systems.