Dr. Oz vows to scrutinize Medicare Advantage as CMS head

By Emily Olsen - Dr. Mehmet Oz, President Donald Trump’s pick to lead the CMS, pledged to scrutinize Medicare Advantage insurers in an effort to rein in costs during a confirmation hearing last week. “We’re actually apparently paying more for Medicare Advantage than we’re paying for regular Medicare. So it’s upside down,” he said in front of the Senate Finance Committee Friday. Read Full Article…

HVBA Article Summary

1. Potential Conflicts of Interest: If confirmed as CMS administrator, Oz would oversee programs covering over 160 million Americans. However, concerns have been raised about his previous advocacy for Medicare Advantage (MA), his role as a broker for MA plans, and his ownership of UnitedHealth Group stock. While he has pledged to divest from some healthcare holdings, questions about impartiality remain.

2. Medicare Advantage Cost Concerns: MA has grown in popularity, but it is costing the government significantly more than traditional Medicare, with an estimated $84 billion in additional spending this year. Oz has pointed to upcoding—where MA plans increase diagnosis codes to boost payments—as a key driver of higher costs and has suggested reforms to address it.

3. Reducing Prior Authorization Burdens: Oz has proposed limiting the number of procedures requiring prior authorization from insurers, reducing the current list from 5,500 to 1,000. This reform aims to ease provider burdens and prevent excessive denials, especially as AI-driven claim denials by MA plans face scrutiny from lawmakers and regulators.

All selected drugmakers agree to second round of price negotiations under the IRA

By Nicole DeFeudis - The second round of Medicare price negotiations is now underway for all 15 selected drugs with signed agreements in place from the manufacturers of those drugs. Twelve manufacturers will negotiate the prices of the 15 drugs picked by CMS, including Novo Nordisk’s blockbuster GLP-1s Ozempic and Wegovy, Merck’s diabetes drug Janumet, and Pfizer’s cancer treatment Ibrance. Read Full Article…

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1. Medicare Drug Price Negotiation Process Begins: CMS officially initiated the drug price negotiation process earlier this month, with manufacturers signing agreements to participate. The agency reaffirmed the negotiation timeline set by the Inflation Reduction Act, with initial offers expected by June 1 and final agreements concluding by Nov. 1, 2024. The new prices would take effect in 2027.

2. Pharmaceutical Companies’ Role in Negotiations: While Pfizer and Astellas jointly produce the cancer drug Xtandi, Astellas will lead its price negotiations. Similarly, AbbVie will handle negotiations for the IBS drug Linzess, despite its partnership with Ironwood Pharmaceuticals.

3. Legal Challenges and Political Uncertainty: Multiple pharmaceutical companies continue to challenge Medicare's negotiation authority in court, with six cases currently on appeal. Meanwhile, CMS nominee Mehmet Oz has expressed support for the process and has committed to defending Medicare’s negotiation efforts if confirmed.

Study reveals how advanced benefits tech can help employers balance costs, care

By Michael Popke - As if employers didn’t already have enough on their plates, they now are under major pressure to balance their benefits spending amid record-high health care costs and growing employee demand for ever-expansive benefits. For some employers, according to a new report, this is “an unsustainable trajectory” that is further exacerbated by widespread financial insecurity and persistent benefits confusion. Read Full Article…  ^{_{(Subscription required)}}

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1. Financial Strain and Benefits Confusion: Nearly half (48%) of employees would feel panicked by a $6,000 emergency room bill, with Gen Z employees feeling the most financial stress (63%). Despite this, benefits confusion remains a persistent challenge, with 86% of employees reporting uncertainty about their benefits for seven consecutive years.

2. AI-Driven Personalization and Engagement: Employees are increasingly engaging with AI-powered benefits tools, with 69% using decision support for right-fit benefits and 89% opting into claims data sharing for personalized experiences. These tools improve employee confidence and enhance the overall benefits experience.

3. Cost Savings and Employer Readiness: AI-driven self-service tools, such as dependent verification and cognitive search, have led to annual employer savings of up to $3 million. The report emphasizes that while employees are ready for AI-driven benefits solutions, employers must be willing to adapt and implement these advanced technologies.

Lantern Unveils Savings Methodology to Increase Transparency for Specialty Care Pricing

By Marissa Plescia - More than half of Americans have employer-sponsored health insurance. However, it is extremely challenging for employers to understand what they are actually paying for healthcare services because there is a lack of transparency and standardized methods for calculating savings. Read Full Article…

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1. Transparent Methodology for Surgical Savings: Lantern publicly released its seven-step methodology for calculating surgical savings, ensuring employers and benefits leaders have a standardized approach to assessing healthcare costs. This method helps eliminate inconsistencies in claims data, define episodes of care, and accurately benchmark costs.

2. Collaboration and Industry Validation: The methodology was refined over two years with input from employers, consultants, health plans, actuaries, and researchers. Experts like Ellen Kelsay (Business Group on Health) and Caroline Pearson (Peterson Health Technology Institute) provided feedback, reinforcing its credibility.

3. Empowering Employers with Better Insights: By increasing price transparency and offering a standardized savings calculation, Lantern aims to help employers make more informed healthcare decisions. The company hopes this initiative sparks industry-wide conversations about cost measurement and drives broader adoption of transparent methodologies.

JPMorgan sued by employees over PBM relationship with CVS

By Jakob Emerson - The lawsuit, filed March 13 in the U.S. District Court for the Southern District of New York, accuses JPMorgan of allowing inflated drug prices through its partnership with its PBM, CVS Caremark. The plaintiffs, which include current and former employees, claim that the bank’s failure to properly oversee its PBM contract resulted in unnecessarily high prescription drug costs, thereby violating the best interests of employees under ERISA. Read Full Article…

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1. Allegations of Excessive Drug Pricing: The lawsuit claims that JPMorgan significantly overpaid for the multiple sclerosis drug teriflunomide, purchasing it for $6,229 compared to approximately $30 at retail pharmacies, raising concerns over fiduciary mismanagement.

2. Failure to Implement Cost-Saving Measures: Despite past initiatives like Haven Healthcare, which aimed to reform pharmacy benefit management (PBM) practices, JPMorgan allegedly ignored recommendations that could have led to lower drug costs and better transparency for its employee health plan.

3. Legal and Financial Implications: The lawsuit seeks to recover overpaid costs and ensure future compliance with ERISA, joining a growing number of legal challenges against large employers accused of mismanaging pharmaceutical benefits, including Owens & Minor, Kraft Heinz, and Wells Fargo.

The AI Healthcare Paradox: Why Breaking Data Silos Is Key To Generalizable, Trustworthy Models

By Sanjay Juneja - Artificial intelligence (AI) is rapidly transforming medicine, promising to revolutionize diagnostics, treatment planning and operational efficiency. But there’s a critical—and often overlooked—flaw in many AI-driven healthcare models: They are only as good as the data they are trained on. Read Full Article…

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1. Breaking Down Institutional Data Silos: AI models trained on limited, institution-specific datasets risk overfitting to local clinical practices, genetic predispositions, and lifestyle-driven health variables. Without broader data representation, these models may perform well in their initial environments but fail in diverse settings, leading to skepticism and reduced adoption.

2. The Risk of Overfitting AI to Localized Data: Overfitting in healthcare AI isn’t just a technical limitation but a threat to patient safety and trust. When AI models are trained on narrow populations, they struggle to generalize across different socioeconomic, geographic, and demographic groups, resulting in ineffective recommendations and decreased clinical confidence.

3. The Path to Generalizable and Trusted AI: To ensure AI can standardize and improve healthcare globally, stakeholders must embrace cross-institutional data sharing, prioritize diverse training sets, and support regulatory frameworks for ethical AI development. Transparent validation and bias audits are essential to building trust and ensuring AI benefits all patient populations.

Highmark posts $29.4B in 2024 revenue amid ongoing rise in utilization

By Paige Minemyer - Highmark Health reported $29.4 billion in revenue and $50 million in net income for 2024 as the organization continues to weather notable headwinds that have battered health insurers. Highmark also posted $209 million in operating losses, according to its earnings report released last week. The full-year results "reflect the negative operating performance of Highmark Health Plans," the company said in a press release, as the team faced cost pressures throughout the year. Read Full Article…

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1. Strong Performance in Insurance and Dental Divisions: United Concordia Dental and HM Insurance Group demonstrated steady growth, driven by increasing dental membership and disciplined pricing strategies. Highmark's insurance division also experienced membership growth, reaching 7.1 million members by January 2025.

2. Health System Growth and Increased Patient Volumes: Allegheny Health Network (AHN) saw improvements in patient volumes across all service areas, with notable increases in inpatient discharges (+3%), outpatient registrations (+6%), and physician and emergency room visits (+5%) through the end of 2023.

3. Navigating Industry Challenges with a Transformational Strategy: Despite headwinds like rising prescription drug costs, Medicaid redeterminations, and high utilization in Medicare Advantage, Highmark remains committed to its long-term Living Health strategy. The company aims to enhance patient outcomes and cost management through value-based care collaboration between its insurance arm and AHN.

GLP-1 drugs need price cuts to be financially viable, researchers say

By Allison Bell - The new-generation weight-loss drugs work very well at preventing obesity, diabetes and death, but they are still much too expensive to be a good financial value for employer plans or other payers, researchers report in a new paper published by JAMA Health Forum. Read Full Article…  ^{_{(Subscription required)}}  

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1. Cost-Effectiveness Projections: Researchers estimate that semaglutide (Wegovy) could become cost-effective at less than $100,000 per quality-adjusted life year (QALY) if its price drops to $1,522 per year, while tirzepatide (Zepbound) would reach the same benchmark at $4,334 per year, significantly lower than their current prices.

2. Potential Health Benefits: Tirzepatide has the potential to halve obesity rates and prevent approximately 21,000 diabetes cases per 100,000 obese or overweight patients with weight-related health issues, highlighting its broader public health impact.

3. Future Price Reductions: The patents for semaglutide and tirzepatide are set to expire in 2032 and 2036, respectively, and increased competition from new-generation weight-loss drugs may drive down prices even before patent expirations, according to Swiss Re.