CMS finalizes rule tightening prior authorization turnaround for insurers

By Rebecca Pifer - Prior authorization is a process wherein a doctor must get approval from a patient’s health insurer before providing a medical service, like prescribing a drug or performing a surgery. Read Full Article…

VBA Article Summary

1. Faster Prior Authorization Turnaround Times: Starting in 2026, federally regulated health insurers, including Medicare Advantage plans, will be required to approve or deny urgent prior authorization requests within 72 hours and respond to standard or non-urgent requests within seven calendar days. This rule aims to significantly reduce the timeframes for decision-making, offering quicker responses to patients and healthcare providers.

2. Specific Denial Reasons Required: Health insurers will now be obligated to provide a specific reason for denying a prior authorization request. This transparency is intended to assist doctors in resubmitting or appealing requests if necessary, potentially reducing bureaucratic hurdles and improving patient care. The rule has garnered support from both payers and providers.

3. Emphasis on Standardization and Automation: The 822-page rule also mandates health insurers to post prior authorization metrics on their websites, implement a standardized application programming interface (API) for prior authorization by January 2027, and expand APIs for patient and provider access. These measures aim to streamline the prior authorization process, enable automation, and enhance data exchange between payers, providers, and patients.

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What to know about January's annual drug price hikes

By Sydney Lupkin - Drug companies often increase prices at the start of the new year, and 2024 seems to be no exception. There have been about 600 price hikes so far in January, according to the drug price nonprofit 46Brooklyn Research. Read Full Article…

VBA Article Summary

1. Moderation in Drug Price Increases: In recent years, the rate at which drug prices have been increasing has moderated compared to the 2010s. The average and median price increases have settled around 5%, as noted by Anthony Ciaccia, CEO of 46Brooklyn. Despite this, there are still expectations for significant numbers of drug price hikes, particularly for brand name drugs, before the month ends.

2. Shift from List to Net Prices: While list prices for drugs are rising, the actual revenue for drugmakers (net price) is often much lower due to substantial rebates and discounts to third parties. The average discount in the marketplace has reached about 52%, meaning drugmakers are earning significantly less than the list price. Moreover, recent years have seen an overall decline in net prices, with a notable acceleration in this trend in 2023.

3. Legislation Impact and Consumer Prices: The American Rescue Plan Act of 2021 has significantly influenced drug pricing by removing the cap on penalties for drug price increases that outpace inflation. This has led some manufacturers to drastically cut prices or withdraw products to avoid hefty penalties. Despite these changes, consumers may not directly benefit from price cuts at the pharmacy counter due to the complex interplay of list prices, net prices, copays, and the role of pharmacy benefit managers in determining the actual cost to the consumer.

Employer-Sponsored Health Insurance Premium Cost Growth and Its Association With Earnings Inequality Among US Families

By Kurt Hager, PhD, MS^1,2 ; Ezekiel Emanuel, MD, PhD^3,4 ; and Dariush Mozaffarian, MD, DrPH^2,5 - Health disparities and affordability of health care are 2 major challenges affecting US society. Half of US adults believe health care costs are difficult to afford, with differences in affordability reported by race and ethnicity.¹ Read Full Article…

VBA Article Summary

1. Impact on Earnings: The study highlights a significant correlation between rising health insurance premium costs and earnings disparities among U.S. families with employer-sponsored health insurance (ESI). From 1988 to 2019, families experienced a mean cumulative loss of $125,340 in earnings due to increasing health insurance premiums, constituting nearly 5% of their total earnings over this period. The impact was disproportionately higher on non-Hispanic Black and Hispanic families compared to non-Hispanic White families, indicating a racial disparity in the financial burden of healthcare costs.

2. Wage Stagnation and Income Inequality: The surge in health insurance premiums is closely linked to wage stagnation and widening income inequality. The study's findings suggest that increasing health care premium costs are a significant factor behind reduced annual earnings and heightened earnings inequality. The burden of premium costs as a percentage of total compensation was notably higher for families at the lower end of the earnings spectrum, exacerbating financial disparities and affecting wage growth across different racial and ethnic groups.

3. Long-term Trends and Policy Implications: Over the 32-year study period, the proportion of compensation consumed by health care premiums rose substantially, indicating a long-term trend of increasing health care costs and its implications on family finances and earnings equality. This trend necessitates a critical evaluation of the U.S. healthcare policy, especially concerning employer-sponsored health insurance, to address the underlying issues of wage stagnation, earning disparities, and the disproportionate impact on low-income and minority families.

Seniors Stuck in Medicare Advantage Nightmare: 'Designed to Confuse' Us

By Suzanne Blake - A growing number of Americans are finding insufficient coverage options or jaw-dropping medical bills after unknowingly signing up for Medicare Advantage. Read Full Article…

VBA Article Summary

1. Challenges and Misinformation with Medicare Advantage Plans: A significant number of seniors are opting for Medicare Advantage plans, attracted by low or zero premiums and additional benefits such as dental care and gym memberships. However, concerns have been raised about the limitations and challenges faced once enrolled in these plans. Issues include restricted access to healthcare providers, difficulties in reverting to traditional Medicare, and misleading marketing practices. Complaints regarding the marketing of Medicare Advantage plans have notably increased, with a Senate Finance Committee report highlighting a doubling of customer complaints from 2020 to 2021. Moreover, there's a lack of awareness among seniors about the differences between traditional Medicare and Medicare Advantage, with many facing problems due to prior approval processes required by the latter.

2. Experiences of Beneficiaries and Experts: Beneficiaries and healthcare professionals have shared their negative experiences with Medicare Advantage plans. Brandon Selfors, a Medicare broker, criticizes the rush in pushing these plans on seniors, while retired pharmacist Cheryl Mozer observes that while seniors may initially enjoy the perks of these plans, they face significant challenges when their health deteriorates, often encountering denials for costly but necessary medical treatments. Linda Muñoz, a senior who unknowingly chose a Medicare Advantage plan, faced limitations in her choice of healthcare providers and unexpected medical bills, despite her plan's assurances. These testimonies highlight the complexities and potential pitfalls of Medicare Advantage plans, especially when beneficiaries require intensive medical care.

3. Advice for Navigating Medicare Choices and Protecting Against Misinformation: While Medicare Advantage plans may suit some individuals, potential enrollees are advised to exercise caution and seek comprehensive information before making a decision. Ernesto Jaboneta, an IT director at a Medicare insurance agency, recommends involving a family member or trusted friend when discussing plans with insurance agents and emphasizes the importance of understanding the differences between captive and independent insurance agents. It's also advisable to compare plans thoroughly, confirm whether personal doctors are within the plan's network, and seek additional guidance from official sources like 1-800-MEDICARE. Awareness of the enrollment periods is crucial for those wishing to switch back to traditional Medicare or change their Medicare Advantage plan.

Feds sue Blue Cross and Blue Shield of Minnesota over health care provider tax payments

By Christopher Snowbeck - The U.S. Department of Labor has brought a lawsuit against Blue Cross and Blue Shield of Minnesota alleging the Eagan-based health insurer wrongly passed along a particular state tax to employer health plans. Read Full Article…

VBA Article Summary

1. Background of the Litigation: The litigation centers on the "provider tax" in Minnesota, introduced in 1994 to support the MinnesotaCare health insurance program for low-income residents. The Department of Labor alleges that Blue Cross, a nonprofit serving as a third-party administrator for self-funded employer health plans, improperly collected over $66.8 million from these plans between 2016 and 2020 to cover the tax obligations of healthcare providers in its network. This was reportedly done without proper authority or disclosure, leading to accusations of Blue Cross acting in its own interest, thereby violating federal fiduciary standards and transaction rules.

2. Blue Cross's Defense and Tax Controversy: In response, Blue Cross contends that the claims are baseless and stem from a misinterpretation of the MinnesotaCare Provider Tax law. The company asserts that its negotiated payment rates encompass all applicable taxes and fees, highlighting its commitment to providing accessible, high-quality care. While the provider tax, often referred to as the "sick tax," has its critics and supporters, the lawsuit specifically targets Blue Cross's administrative handling of the tax for about 370 self-funded employer health plans in Minnesota. It argues that the tax liability falls on healthcare providers, not patients or third-party payers, and that Blue Cross wrongly assumed this liability without the necessary authorization.

3. Allegations and Implications: The lawsuit details that Blue Cross did not transparently pass the tax liability onto the health providers in its network nor did it seek payment from the employers for covering the tax. Instead, it allegedly used its discretionary authority to make the employer-sponsored health plans pay the tax, employing billing practices that obscured the collection of these taxes. This has raised serious allegations about the misuse of assets and discretionary authority in the management or administration of these health plans, prompting the Labor Department to take legal action against Blue Cross.

Cigna CFO takes on expanded role as head of benefits division

By Emily Olsen - Cigna announced a slew of leadership updates on Wednesday, including an expansion of chief financial officer Brian Evanko’s role. Read Full Article…

VBA Article Summary

1. Leadership Changes and Strategy Adjustments: Cigna announced significant leadership changes with Evanko continuing as CFO and serving as president and CEO of Cigna Healthcare, Dennison joining as deputy CFO, and Holgerson taking over as president of the U.S. Commercial segment after Triplett's retirement. Eric Palmer is set to expand his role, driving Cigna's long-term growth and focusing on strategic acquisitions through Cigna Ventures and Evernorth Health Services.

2. M&A Focus and Market Positioning: Cigna is shifting its strategy to concentrate on smaller acquisitions, particularly after the dissolution of a potential merger with Humana. This strategic pivot comes amidst the insurer's expressed interest in divesting its Medicare Advantage business, potentially to Health Care Service Corp., as it faces stiff competition from major players like UnitedHealth and Humana.

3. Financial Performance and Outlook: The insurer reported a solid financial performance with an 8% increase in revenue to $49 billion and a net income of $1.4 billion in the third quarter of the previous year. Looking forward, Cigna is scheduled to release its fourth-quarter financial results on February 2, providing further insight into its financial health and the impact of its strategic decisions.

How Should Health Plans Respond to Surging Interest in Weight Loss Drugs?

By Nancy K. Klotz, MD, MBA - Since the NIH started measuring obesity prevalence in the U.S. 60 years ago, the rates have tripled opens in a new tab or window, with more than 42% of American adults considered obese and another 31% overweight. Read Full Article…

VBA Article Summary

1. The Rise of Effective Weight-Loss Drugs: The introduction of GLP-1 receptor agonists such as Eli Lilly's tirzepatide (Mounjaro) and Novo Nordisk's semaglutide (Ozempic) has marked a significant advancement in the treatment of obesity. Originally indicated for diabetes, these drugs have shown impressive results in weight loss for diabetic patients with obesity. The latest drug to receive FDA approval, tirzepatide (Zepbound), further expands the options available. However, despite their potential, the coverage of these drugs by insurance companies remains uncertain. This uncertainty is particularly prevalent in different insurance models, where the decision to cover these treatments falls either on health insurance companies or plan sponsors, depending on the specific contractual arrangements.

2. Financial Considerations and Public Interest: There is a notable public interest in prescription weight-loss drugs, as evidenced by a Kaiser Family Foundation poll where 45% of adults expressed interest in taking such medications. However, this interest significantly diminishes to 16% if the drugs are not covered by insurance. The cost of these drugs is substantial, averaging around $1,000 per month, making insurance coverage a pivotal factor in their accessibility. Clinical studies have underscored the efficacy of these drugs, with tirzepatide leading to an average weight loss of 26.6% of body weight and semaglutide showing a 20% reduction in the risk of heart attacks and stroke among adults with heart disease and obesity.

3. Insurance Coverage Dilemma and Future Implications: Most private insurances and federal programs currently do not cover weight-loss drugs like tirzepatide and semaglutide, primarily due to their high costs and historical concerns about the safety of weight-loss drugs. Viewing obesity as a chronic condition necessitates a long-term treatment approach, potentially including lifetime drug use, alongside weight management programs. The decision for health insurance carriers and self-insured employers to cover these drugs involves a delicate balance between immediate financial implications and the potential for long-term health benefits. Coverage decisions may include strict eligibility criteria, as seen with the FDA's approval for semaglutide and Zepbound for patients meeting specific BMI and health condition criteria. While the financial effectiveness of covering these drugs long-term is still under scrutiny, the clinical benefits they offer make a compelling case for their inclusion in treatment regimens for certain populations.

CES 2024: Mark Cuban, Glen Tullman sound off on building new models of care for consumers and AI's impact

By Heather Landi - Artificial intelligence was dominating CES 2024 this week. From assistive speech tools to pet wearables to AI-enabled pillows to prevent snoring, the majority of companies exhibiting at CES boasted the use of the technology as part of their products. Read Full Article…

VBA Article Summary

1. Innovations and Challenges in Healthcare AI: Digital health companies are increasingly integrating AI into their products, exemplified by innovations like Intuition Robotics' AI-enabled ElliQ care companion robot and advanced hearing eyewear. Mark Cuban emphasizes AI's transformative potential in healthcare, predicting a future where AI is not monopolized by a few but proliferates across millions of specialized models catering to individual needs, professionals, and industry verticals. However, he also points out significant challenges, particularly in intellectual property protection and access to information, stressing the need for a framework that respects individual entities' contributions in shared AI models.

2. Mark Cuban's Ventures and Industry Trends: Cuban, known for his venture Cost Plus Drug aiming at affordable and transparent prescription drug pricing, has influenced major pharmacy players and partnered with Amazon Pharmacy through Blue Shield of California. Meanwhile, Glen Tullman of Transcarent sees AI as a pivotal tool in healthcare to alleviate administrative burdens for clinicians, personalize patient care, and enhance decision-making efficiency. Both Cuban and Tullman highlight the consumer's increasing power in a post-COVID era, urging innovators to adapt to this shift, particularly in light of new price transparency regulations and consumer preferences for cash-pay services over traditional insurance.

3. Strategic Focus on Consumer-Centric Healthcare: Cuban and Tullman advocate for a healthcare system that prioritizes consumer needs, transparency, and cost-effectiveness. They encourage both consumers and employers to critically assess and leverage healthcare options that offer better experiences and lower costs, like Cost Plus and Transcarent. Tullman, in particular, urges entrepreneurs to harness technology to streamline healthcare processes, thereby enhancing the quality and accessibility of care. Both emphasize the necessity of breaking from traditional models to address pressing issues in healthcare, such as equity, cost, and quality.

Plastic chemicals linked to $249 billion in US health care costs in 2018 alone, study finds

By Sandee LaMotte - By contributing to the development of chronic disease and death, a group of hormone-disruptive plastic chemicals is costing the US health care system billions — over $249 billion in 2018 alone, a new study found. Read Full Article…

VBA Article Summary

1. Highlighting the Human Health Impact of Plastic Production Chemicals: The article emphasizes the significant human health threats posed by endocrine-disrupting chemicals used in plastic production, as noted by Dr. Leonardo Trasande of NYU Langone Health. These threats include severe conditions such as cancer, brain damage, obesity, diabetes, heart disease, and early deaths, predominantly ignored by U.S. industries and policymakers. The study seeks to provide a clearer understanding of exposure routes and potential solutions, potentially influencing consumer and policymaker perspectives on regulating these chemicals.

2. Economic and Societal Costs of Chemical Exposure in Plastics: The research scrutinizes the economic burden of exposure to four major groups of chemicals found in plastics—PBDE, phthalates, bisphenols, and PFAS—highlighting the staggering healthcare costs they incur, amounting to billions of dollars. The article underlines the imbalance where society and individuals bear the health costs, while manufacturers profit, advocating for a societal reevaluation of plastic use and a push towards the 'polluter pays' principle. Furthermore, the study reveals the vast number of chemicals involved in plastic production, over 16,000, with a significant portion lacking data on their hazardous nature, indicating a potentially greater health cost impact than currently estimated.

3. Challenges and Calls for Comprehensive Research: The American Chemistry Council emphasizes the complexity of establishing a causal link between chemical exposure and human diseases, highlighting the need for thorough scientific and economic research. Despite this, the article points out that the selected chemicals in the study have been extensively researched, showing detrimental effects on developmental, reproductive, immune, and cognitive systems. The study acts as a foundation for future research, urging the consideration of the broader spectrum of chemicals involved in plastic production and their associated health risks, and advocating for more comprehensive health cost analyses, including the incidence of cancers caused by these chemicals.