Elevance Had to Give $342 Million Back to Taxpayers

By Wendell Potter – Elevance Health, one of the nation’s biggest health insurance conglomerates, wired more than $342 million to the Centers for Medicare & Medicaid Services a few weeks ago after the agency threatened to suspend enrollment in the company’s Medicare Advantage plans over what CMS described as years of “substantial and persistent noncompliance” with federal billing requirements. Read Full Article...

HVBA Article Summary

1. Escalating Federal Enforcement: The payment followed threats from CMS to suspend new enrollments in Elevance’s Medicare Advantage plans, signaling a tougher stance from regulators. According to the article, the company may ultimately owe close to $1 billion, indicating that the $342 million transfer could be only a portion of its total liability. CMS concluded that Elevance failed for years to correct unsupported diagnosis codes that influence reimbursement levels. Elevance has said it disagrees with the government’s interpretation of the rules and denies wrongdoing.

2. Pattern of Billing and Reporting Concerns: CMS reported that Elevance repeatedly declined to use required electronic reporting systems and instead submitted corrections via encrypted flash drives, despite repeated warnings. The dispute centers on diagnosis codes that affect risk scores, which in turn determine how much Medicare pays private insurers. The article states that the company had previously set aside funds in anticipation of potential liability. These details suggest regulators viewed the compliance issues as ongoing rather than isolated incidents.

3. Broader Medicare Advantage Overpayment Issues: The article places Elevance’s case within a larger context of federal audits and watchdog findings about Medicare Advantage billing. The HHS Office of Inspector General recently identified $462 million in likely improper payments tied to unsupported stroke diagnoses. It also cites projections that improper payments to Medicare Advantage plans could exceed $1 trillion over the next decade, and that MedPAC estimates $76 billion in overpayments this year alone. Together, these figures underscore mounting scrutiny of how private insurers are reimbursed under the program.

CMS targets 340B, site-neutral rates in 2027 outpatient rule — 8 things to know

By Alan Condon – CMS plans to cut what Medicare pays hospitals for drugs bought through the 340B program and push site-neutral payment into a new category of outpatient services, two proposals that together would pull billions of dollars out of hospital outpatient revenue beginning in 2027. The changes are part of the 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgery Center proposed rule, issued July 2 by CMS. The rule would affect roughly 3,500 hospitals and 6,400 ASCs. Read Full Article...

HVBA Article Summary

1. Significant 340B payment reductions and redistribution: CMS is proposing to reimburse 340B-acquired drugs at average sales price minus 33.4%, a sharp shift from the current add-on structure. The agency estimates this would reduce Original Medicare drug payments by $4.55 billion and lower beneficiary drug spending by $1.15 billion in the first year. Because of budget neutrality requirements, those savings would be redistributed through higher payments for non-drug outpatient services. This would effectively move revenue away from 340B hospitals and spread it more broadly across outpatient providers.

2. Accelerated recovery of prior 340B payments: CMS also plans to speed up recoupment of $7.8 billion in additional non-drug payments hospitals received between 2018 and 2022 under an earlier 340B policy. The proposal would increase the annual offset to the OPPS conversion factor from 0.5% to 3% starting in 2027, with full recovery projected by 2029. Hospitals that joined Medicare after Jan. 1, 2018 would be excluded from the adjustment. Industry groups have expressed opposition to shortening the repayment timeline, signaling potential pushback during the comment period.

3. Expansion of site-neutral payments and broader outpatient shifts: The rule would extend site-neutral payment policies to imaging services delivered in certain off-campus hospital departments, with projected first-year Medicare savings of about $260 million and $70 million in reduced beneficiary cost-sharing. Rural sole community hospitals would be exempt from this change. CMS is also continuing to phase out the inpatient-only list, proposing to remove 638 services across multiple clinical categories, and expanding the ASC Covered Procedures List. Together, these steps provide more flexibility to shift care into lower-cost outpatient and ambulatory surgery center settings.

Hub IPO could offer new clues about the benefits brokerage market

By Allison Bell – Hub International could soon go public and offer employers and benefits advisors more public clues about how the U.S. employee benefits market is really doing. The Chicago-based insurance broker reported last week that it has filed a confidential draft registration statement for a public stock offering with the U.S. Securities and Exchange Commission. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. IPO Could Increase Market Transparency: If Hub proceeds with its public offering, it may provide more detailed financial disclosures about its benefits brokerage operations. Public companies are required to share regular earnings reports and other filings, which can shed light on revenue trends and strategic priorities. This could give employers and advisors clearer insight into how the broader employee benefits market is performing. Currently, much of that detail is limited compared to what is available from already public competitors.

2. Significant Scale in Benefits Brokerage: Hub is reported to be the fifth-largest U.S. benefits broker, generating about $1.4 billion in 2024 benefits revenue. The company employs 21,000 people across 700 offices and reported $5.3 billion in total revenue for 2025. Analysts estimate that an IPO could value the firm at roughly $30 billion. These figures highlight Hub’s substantial footprint in both the insurance and employee benefits sectors.

3. Competitive Landscape and Ownership History: The four larger benefits brokers—Marsh, WTW, Aon and Arthur J. Gallagher—are already publicly traded and occasionally discuss health benefits trends in earnings calls. Hub’s move would align it more closely with these peers in terms of disclosure obligations and investor scrutiny. The company has shifted ownership multiple times, going public in Canada in 1999, listing on the NYSE in 2002, and later being acquired by private equity firms, including a $4.4 billion sale to funds associated with Hellman & Friedman in 2013. An IPO would mark another significant transition in its corporate structure.

9 insurers exiting ACA markets

By Jakob Emerson – Nine insurers have announced they will stop offering ACA marketplace plans, either nationally or in specific states, after the 2026 plan year. The withdrawals come amid declining enrollment nationwide, rising premiums and the expiration of enhanced premium tax credits at the end of 2025. CMS estimates its 2027 final rule will push enrollment down by another 1.2 million to 2 million next year. Read Full Article...

HVBA Article Summary

1. Broad Insurer Retreat Across Multiple States: Nine insurers have announced plans to exit Affordable Care Act marketplaces either entirely or in selected states following the 2026 plan year. The departures span a wide geographic footprint, including states such as Arizona, Texas, Florida, and Ohio. Some insurers are leaving only specific market segments, such as small group coverage, while others are withdrawing from individual exchanges. This pullback reflects a notable contraction in marketplace participation heading into 2027.

2. Significant Member Disruptions in Certain Markets: Several exits will affect large enrollee populations, including one insurer’s withdrawal impacting about 369,000 members across multiple states and another affecting roughly 100,000 Texas enrollees. In Indiana alone, about 60,000 members will need to seek alternative coverage due to one carrier’s departure. These changes may require affected individuals and small groups to compare new plan options during open enrollment. Market exits of this scale can also influence local competition and plan pricing dynamics.

3. Strategic Shifts and Market Pressures Driving Decisions: Insurers cited a mix of financial and regulatory pressures influencing their decisions, including declining enrollment and expiring enhanced premium tax credits. At least one company is exiting the insurance business entirely to focus on a direct primary care platform for self-funded employers and third-party administrators. Others are narrowing their geographic or product focus rather than maintaining broader ACA exchange participation. The collective exits suggest ongoing volatility in ACA marketplaces as insurers reassess risk and long-term sustainability.

Workplace mental health: Awareness is high, but access is low

By Kristen Smithberg – Nearly every employee knows their employer offers mental health benefits, but awareness alone isn't translating into care, according to a new survey from Segal that suggests employers should focus less on promoting benefits and more on making them easier and more affordable to use. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Awareness Does Not Equal Utilization: Although virtually all employees surveyed said they know about their mental health benefits and trust employer-provided information, that familiarity has not led to widespread normalization of use. Fewer than four in 10 workers said using these benefits feels normal in their workplace culture. Nearly half indicated that while benefits exist, they are not openly discussed. This gap suggests cultural acceptance and open dialogue remain barriers even when communication efforts are strong.

2. Logistical and Financial Barriers Drive Hesitation: Time constraints emerged as the most common reason employees delay seeking care, cited by 44% of respondents. Cost concerns are also prominent, with more than two-thirds worrying about affordability and 35% saying lower out-of-pocket costs or clearer pricing would most encourage them to seek care. Access challenges, such as difficulty finding in-network providers accepting new patients, were also highlighted. Together, these factors point to structural hurdles rather than stigma as the primary deterrents.

3. Workplace Stressors Remain Widespread: A significant majority of employees identified work as a major source of stress over the past year, alongside financial pressures and family responsibilities. Respondents linked deteriorating mental health at work to heavy workloads, unrealistic deadlines, toxic cultures, low pay and poor management behavior. While nearly seven in 10 employees or their family members have used employer-sponsored benefits and many reported positive experiences, others encountered high costs and administrative obstacles. The findings suggest that improving workplace conditions may be as important as enhancing benefit design.

Court dismisses PBMs’ lawsuit against FTC following insulin settlements

By Rebecca Pifer Parduhn – Major pharmacy benefit managers’ countersuit against the Federal Trade Commission for accusing them of inflating the cost of insulin has been dismissed, after Express Scripts, Caremark and Optum Rx elected to settle with antitrust regulators over the allegations. The 8th Circuit Court of Appeals dismissed the lawsuit on Tuesday after both sides mutually decided to drop the litigation. Cigna’s Express Scripts, CVS’ Caremark and UnitedHealth’s Optum Rx had turned to the 8th Circuit in early 2025 after a district court declined to halt the FTC’s insulin pricing lawsuit against them. Read Full Article...

HVBA Article Summary

1. FTC’s Core Allegations Against PBMs: The Federal Trade Commission sued Express Scripts, Caremark and Optum Rx in late 2024, arguing the companies favored higher-priced insulin products because those drugs generated larger rebates from manufacturers. Regulators claimed this structure incentivized pharmaceutical companies to raise list prices. The agency’s case centers on whether PBM business practices distort competition and harm patients. The lawsuit is part of broader antitrust scrutiny of the prescription drug supply chain.

2. Market Power and Legal Back-and-Forth: The three PBMs collectively control about 80% of U.S. prescriptions, underscoring their significant influence over drug pricing and formularies. After a district court allowed the FTC’s case to proceed, the companies sought relief from the 8th Circuit Court of Appeals to block the litigation. The appeals court denied their request for an injunction earlier this year. Following subsequent settlement agreements, the countersuit has now been formally dismissed.

3. Settlement Terms and Potential Impact: Express Scripts’ finalized agreement requires it to delink compensation from negotiated drug savings, avoid favoring higher-cost drugs over cheaper equivalents on standard formularies and increase transparency around spending. The FTC estimates the changes could reduce patients’ out-of-pocket costs for medications such as insulin by up to $7 billion over 10 years. Analysts suggest the deal may not materially harm Express Scripts’ financial performance because it had already been implementing similar reforms. Proposed settlements from Caremark and Optum Rx are expected to mirror key elements of the Express Scripts agreement.

Cancer centers ration chemo amid new shortages

By Tina Reed – Doctors are reporting new shortages of widely used generic cancer drugs, prompting fears that some treatments will need to be delayed or rationed. Read Full Article...

HVBA Article Summary

1. Hospitals face steep drops in key drug availability: Supply constraints are affecting staple chemotherapy agents used to treat multiple advanced cancers. Hospital fill rates for cisplatin fell to 66% in June, well below Premier’s 80% “danger zone” threshold, while ifosfamide dropped even further to 37%. Such declines mean hospitals are not receiving the full quantities they order, increasing the likelihood of treatment delays or substitutions. Physicians are reviewing whether patients can tolerate alternative regimens when preferred drugs are unavailable.

2. Market pressures are straining generic drug supply chains: Experts say the shortages reflect the fragile economics of older generic medicines, where thin profit margins and strict pricing rules limit manufacturers’ flexibility. Rising platinum prices, a key component in some chemotherapy drugs, have fueled concerns and in some cases panic-buying to avoid a repeat of prior shortages. Manufacturing disruptions have compounded the issue, with one supplier recovering more slowly than expected and others discontinuing production or placing drugs on backorder. Together, these factors expose vulnerabilities in the production and distribution of essential cancer treatments.

3. Shortage timelines and federal response vary by drug: Industry experts expect supplies of carboplatin and cisplatin to stabilize within about a month, though localized gaps may persist. In contrast, ifosfamide shortages could last six months to a year due to ongoing production setbacks. The Food and Drug Administration says it is working with manufacturers to assess constraints, boost inventories and consider temporary importation if needed. Meanwhile, high demand for certain diagnostic contrast agents suggests supply pressures extend beyond chemotherapy drugs alone.