Healthcare Docket: Feds and States Move to Curb Private Equity’s Takeover of Healthcare

By Ron Harman King - Good old American capitalism is getting a hard look under the healthcare regulatory microscope. And not a moment too soon, in the eyes of some. For your next doctor’s appointment, odds are nearly 3-1 that the physician who sees you is a corporate employee. And regulators and legislators far and wide are saying that this ratio may be harmful to your health. Read Full Article…

VBA Article Summary

1. Federal and State Oversight Intensifies: On March 5, three federal agencies announced a joint investigation into the increasing influence of corporate and private-equity investment in the U.S. healthcare system, citing concerns over profit maximization at the expense of quality care. This initiative mirrors actions at the state level, where nearly a dozen states have enacted or are enacting laws to increase oversight of healthcare mergers and acquisitions, reflecting a growing concern over the negative impacts of corporate ownership on healthcare quality and accessibility.

2. Healthcare Providers and Patient Care Under Strain: A significant portion of healthcare professionals view private equity's involvement in healthcare negatively, with over 60% expressing concern in a survey. This sentiment is underpinned by reports of rising physician and nurse burnout, attributed to corporate pressures for increased patient loads, leading to deteriorated patient care. Studies highlight that patients in private equity-owned hospitals and nursing homes experience higher rates of adverse events and mortality, with associated increases in healthcare costs for patients and insurers.

3. Legislative Responses and Future Implications: In response to these concerns, states are stepping up regulatory efforts, with legislation requiring advance notice for healthcare entity acquisitions and mergers. Indiana aims to join other states in this regulatory approach, highlighting a bipartisan recognition of the need for oversight. The trend of corporate consolidation raises questions about the future landscape of American healthcare, likening it to the banking sector's consolidation, with fears that independent medical practices may face extinction due to economic pressures and the growing dominance of corporate-owned healthcare entities.

Lilly weight-loss drug Zepbound new US prescriptions surpass Wegovy for first time

By Patrick Wingrove - Eli Lilly’s (LLY.N), opens new tab powerful weight-loss drug Zepbound hit 77,590 new prescriptions in the U.S. for the week ending March 8, surpassing Novo Nordisk’s (NOVOb.CO), opens new tab rival obesity medicine Wegovy for the first time since it was launched, according to data from IQVIA. Read Full Article…

VBA Article Summary

1. Market Dynamics and Prescription Trends: According to JPMorgan data, there was a decline of approximately 6,000 Wegovy prescriptions in one week in the United States, although Novo Nordisk maintained a significant lead over Eli Lilly's Zepbound with 25,307 more total weekly prescriptions. This fluctuation comes amidst a fiercely competitive market for weight loss medications, expected to reach at least $100 billion by the decade's end, driven by high consumer demand outstripping supply.

2. Drug Approvals and Market Potential: The U.S. FDA recently approved Wegovy for reducing stroke and heart attack risks in overweight or obese adults without diabetes, spotlighting the significant health benefits of GLP-1 agonist drugs. These medications, initially developed for type 2 diabetes, have gained popularity for their weight reduction capabilities, sometimes up to 20%, and their potential in treating various health conditions has led analysts to predict a surge in their market value. GlobalData forecasts the GLP-1 drug market to reach $105 billion by 2029, with Novo Nordisk expected to dominate over half of this market share.

3. Innovations and Partnerships: Novo Nordisk announced plans to launch a pill version of its weight-loss drug amycretin within this decade, a move that could significantly impact the treatment landscape by offering a non-injectable option. Meanwhile, Eli Lilly revealed a partnership with Amazon's pharmacy unit for its direct-to-consumer service, LillyDirect, which includes Zepbound among its offerings. This strategic collaboration aims to streamline prescription deliveries, highlighting the pharmaceutical industry's evolving approaches to access and distribution in a highly competitive market.

Change attack update: What 15 payers discussed with the Biden administration

By Jakob Emerson - Fifteen insurers and trade groups met with Biden administration officials March 18 to discuss the industry's ongoing response to the cyberattack on Change Healthcare last month. Read Full Article…

VBA Article Summary

1. Preparation and Concerns Ahead of the Meeting: Prior to a key meeting, payers were requested to come prepared with specifics on their financial support for providers, identify existing challenges, and outline recovery efforts. A significant worry highlighted by Bloomberg was the uncertainty surrounding the recoupment of advanced funds in the future. The meeting aimed to address these and other concerns, highlighting the critical nature of financial support and sustainable recovery strategies in the healthcare sector.

2. Discussions and Actions During the Meeting: The meeting saw stakeholders acknowledging improvements in the re-establishment of claims processing systems, yet it was noted that small, rural, and safety-net providers continue to face cash flow problems. A notable requirement was for healthcare organizations to demand third-party certification of cybersecurity from Change, with a push for UnitedHealth to provide a clear timeline. Furthermore, payers were encouraged to use their data to identify providers in need of more support and to initiate direct engagement. Efforts to accelerate payments to Medicare and Medicaid providers and provide loans were among the commitments made by payers, showcasing a proactive approach to support the financial health of providers.

3. UnitedHealth's Commitment and Sector-Wide Restoration Efforts: UnitedHealth demonstrated significant support by advancing over $2 billion to providers and announcing a medical claims preparation program. This comes alongside notable progress in restoring essential services, with 99% of pharmacy network services back online as of March 7, and the electronic payments platform of Change being restored by March 15. These developments are critical for the ongoing recovery and stabilization of the healthcare sector, underlining the concerted effort by major healthcare payers and organizations to address the challenges posed by the pandemic and to ensure the continuity of care.

Intermountain Health CISO: The Industry Needs Better Transparency After Cyberattacks

By Katie Adams - Health systems rely on their third-party partners. Any given hospital in this country likely has contracts with hundreds of companies providing the services they need to maintain daily operations — from telehealth platforms to revenue cycle software to laundry workers. Read Full Article…

VBA Article Summary

1. Vulnerability of Healthcare Systems to Third-Party Cyberattacks: The recent cyberattack on Change Healthcare, a significant software company handling patient payments for hospitals and pharmacies, underscores the heightened risk healthcare systems face due to their reliance on third-party vendors. This incident exemplifies how a cyberattack on a single entity can have wide-reaching effects on healthcare providers nationwide, illustrating the interconnected nature of the industry's infrastructure.

2. Challenges in Cybersecurity Transparency: Erik Decker, Intermountain Health’s chief information security officer, emphasizes the industry's need for greater transparency in the aftermath of cybersecurity incidents. However, legal concerns, the risk of tarnishing an organization's reputation, and the potential for exacerbating cybersecurity vulnerabilities pose significant barriers to information sharing. Decker highlights the fine balance required in communication efforts during the initial stages of a cyberattack, where the lack of solid information can lead to speculation and unnecessary panic within the industry.

3. Strategic Information Sharing Post-Attack: Despite these challenges, there are mechanisms in place for sharing crucial information about cyberattacks within the healthcare sector. Decker points out that sharing 'indicators of compromise' through federal channels can help other organizations fortify their defenses against similar threats. The example of the University of Vermont Health Network, which openly shared its experiences and lessons learned from a ransomware attack, is cited as an exemplary approach to fostering industry-wide resilience and preparedness against cyber threats.

Direct Liability of Business Associates

By U.S. Department of Health & Human Services - In 2009, Congress enacted the Health Information Technology for Economic and Clinical Health (HITECH) Act,¹  making business associates of covered entities directly liable for compliance with certain requirements of the HIPAA Rules. Read Full Article…

VBA Article Summary

1. Direct Liability of Business Associates for HIPAA Violations: Following the HITECH Act and the 2013 final rule by the HHS Office for Civil Rights, business associates are directly liable under the HIPAA Rules for specific violations. This includes failures such as not providing records or compliance reports to the Secretary, not cooperating with investigations, taking retaliatory actions against complaint filers, and not adhering to Security Rule requirements. Additionally, they are accountable for improper breach notifications, uses, and disclosures of PHI, and for not providing electronic PHI upon request.

2. Enforcement Authority Over Business Associates: The OCR has the authority to enforce compliance only for the provisions of the HIPAA Rules that are directly applied to business associates. This includes instances where a business associate fails to comply with requirements such as making reasonable efforts to limit PHI to the minimum necessary, failing to provide an accounting of disclosures, and not entering or complying with business associate agreements with subcontractors handling PHI.

3. Limitations of OCR’s Enforcement Authority: Despite the broad enforcement capabilities, OCR cannot enforce the “reasonable, cost-based fee” limitation against business associates as the HITECH Act does not extend this specific provision to them. Responsibility falls on covered entities to ensure fees charged for accessing PHI through business associates do not exceed the permitted limit under HIPAA, with OCR retaining the ability to enforce this against the covered entities directly, not the business associates.

MedPAC: Medicare Advantage needs major overhaul — now

By Rylee Wilson - The Medicare Payment and Advisory Commission called for a "major overhaul" of Medicare Advantage policies in its annual report to Congress. Read Full Article…

VBA Article Summary

1. MedPAC's Annual Report Highlights Medicare Spending Concerns: The Medicare Payment Advisory Commission (MedPAC) published its annual report on March 15, estimating that in 2024, the U.S. government will spend $83 billion more on Medicare Advantage (MA) beneficiaries than if these individuals were enrolled in traditional fee-for-service Medicare. This increased spending is projected to raise Medicare premiums by $13 billion and is partly attributed to a 20% higher coding intensity in Medicare Advantage compared to fee-for-service Medicare.

2. Call for Major Policy Overhaul in Medicare Advantage: MedPAC has urgently called for a comprehensive overhaul of Medicare Advantage policies. The commission identifies several critical issues needing immediate attention, including significant cost disparities between fee-for-service Medicare and Medicare Advantage, inadequate information on the use and value of supplemental benefits, and challenges in setting accurate benchmark payment rates. MedPAC's recommendations to Congress include addressing coding intensity, reforming the star ratings program, and revising benchmark payments.

3. Debate Over Supplemental Benefits and Insurer Reactions: The report expresses skepticism regarding the value of supplemental benefits funded by federal payments to Medicare Advantage plans. MedPAC warns that reducing payments to these plans could lead to cuts in supplemental benefits or higher premiums for beneficiaries. However, insurers argue that they might adjust other aspects of their bids instead of reducing benefits. AHIP CEO Mike Tuffin criticized MedPAC's estimates as speculative and emphasized the importance of maintaining stability for the over 33 million beneficiaries reliant on Medicare Advantage, advocating for enhancements to the program rather than undermining it.

Health spending spikes in Massachusetts amid high drug expenses, unprecedented patient cost sharing, regulator warns

By Dave Muoio - Pharmaceutical costs, non-claims payments and outpatient care fueled “unchecked” healthcare spending in Massachusetts that's increasingly being felt by its residents, according to new findings from the state’s healthcare regulator. Read Full Article…

VBA Article Summary

1. Rising Healthcare Expenditures Above Benchmarks: Massachusetts' healthcare spending per capita rose by 5.8% from 2021 to 2022, reaching $10,264, surpassing both the national increase rate of 4.1% and the state's Health Policy Commission benchmark of 3.1%. This trend of exceeding benchmarks has been consistent since 2017, emphasizing the state's struggle to control healthcare costs despite efforts to keep spending in check.

2. Increasing Costs in Key Areas and Affordability Concerns: The report highlights significant increases in healthcare costs, including a 5.8% growth in premiums and a 26% rise in patient cost-sharing over two years, marking the highest shift in over a decade. With healthcare costs growing faster than wages, affordability is becoming a pressing issue for Massachusetts residents. Specifically, pharmaceutical costs have surged, leading the growth in healthcare spending and prompting calls for targeted policy action to manage prescription drug pricing.

3. Policy Implications and the Path Forward: Massachusetts has historically been at the forefront of healthcare policy innovation, but the current trends suggest a need for more aggressive measures to control spending. The report calls for enhanced oversight and policy interventions, especially in pharmaceutical spending, to prevent healthcare from becoming even more unaffordable. With a significant portion of residents enrolled in high-deductible plans and reporting affordability issues, the state faces the challenge of ensuring accessible and affordable healthcare for all its residents, reaffirming the urgency for continued and effective cost containment efforts.

One-third of consumers unaware of life insurance tax benefits, says study

By Rayne Morgan - Nearly a third of Americans do not realize that they can save on taxes through life insurance, according to a new study by Assurance IQ. Experts suggest this can be a missed opportunity to save money, especially at a time when most consumers are looking to save. Read Full Article…

VBA Article Summary

1. Misunderstandings and the Importance of Literacy in Life Insurance: Tim Hoolihan of Assurance IQ highlighted the critical need for financial and insurance literacy among Americans, noting a common misconception that life insurance death benefits are taxable as income. This misunderstanding can lead to individuals purchasing unnecessary additional coverage. Christopher Bertinelli from Lenox Advisors and Hoolihan both emphasized the significance of understanding life insurance's tax implications, advocating for consulting tax advisors to grasp potential tax liabilities better.

2. Consumer Confusion and Tax Benefits of Life Insurance: Assurance IQ's study revealed a considerable portion of consumers are either unsure or mistakenly believe they would owe taxes on life insurance death benefits. Hoolihan clarified that life insurance payouts are generally tax-free, except under specific circumstances related to estate or gift taxes. He also pointed out the tax advantages of whole life insurance policies, such as tax-deferred cash value growth, which can provide financial benefits like using the cash value to pay policy premiums or borrowing against it without impacting credit scores.

3. Broadening the Scope of Insurance Literacy: The research by Assurance IQ uncovered widespread unawareness among American consumers regarding the tax benefits of various insurance types, including medical insurance savings accounts. This gap in knowledge presents an opportunity for financial professionals to educate and guide their clients towards maximizing savings through insurance. The findings suggest a significant potential for improved financial security through increased insurance literacy, with professionals like Kevin Ross and Hoolihan advocating for personalized guidance to help consumers make informed choices.

Workers seeing financial wellness benefits as a ‘must-have,’ study finds

By Ayo Mseka - Workers are increasingly seeing financial wellness benefits as a 'must-have,' according to findings in Vestwell's annual Savings Industry Report. Read Full Article…

VBA Article Summary

1. Increasing Demand for Comprehensive Financial Wellness Offerings: Aaron Schumm, founder and CEO of Vestwell, highlights a growing trend among employees who now consider financial-wellness offerings, beyond traditional 401(k) plans, as essential in the workplace. This shift is driven by concerns over inflation, uncertain economic conditions, and their impact on retirement goals. Employers and financial advisors are presented with a significant opportunity to meet these evolving expectations by expanding their financial wellness and retirement benefits.

2. Survey Findings on Employee Expectations and Benefits: A survey involving over 1,200 employees revealed a strong expectation for workplace retirement benefits, with 85% of respondents expecting such offerings from their employers, and 89% indicating they are more likely to remain with an employer that provides retirement benefits. Additionally, the survey indicates a rising demand for education-savings benefits, reflecting the broader challenge of student debt impacting employees' ability to save for the future. Notably, 93% of respondents with student loans reported that their debt hinders their savings capabilities, underscoring the importance of offering student loan-related benefits and 529 Education Savings Accounts as part of a holistic approach to financial wellness.

3. Innovative Solutions to Student Debt and Retirement Savings: Fidelity Investments introduces a pioneering benefit, Student Debt Retirement, enabled by the SECURE 2.0 legislation. This program allows employers to contribute to employees' retirement savings as a match to student loan payments, effectively addressing the challenge of saving for retirement while managing student debt. The benefit aims to significantly improve employees' financial wellness by potentially doubling their 401(k) balances and the amount of retirement expenses they can cover, demonstrating the impactful role that tailored financial benefits can play in enhancing employee retention, satisfaction, and overall financial security.

HHS artificial intelligence task force takes shape

By Rebecca Pifer - Details are emerging on a new HHS task force faced with a monumental task: creating a regulatory structure to oversee utilization of artificial intelligence in healthcare. Read Full Article…

VBA Article Summary

1. Comprehensive Oversight Plan for AI: In response to an executive order by President Joe Biden, the U.S. Department of Health and Human Services (HHS) has been tasked with creating a comprehensive plan to assess artificial intelligence (AI) technologies before they go to market and to monitor their performance and quality once in use. This task, expected to be delivered within 12 months from its commencement, poses a significant challenge due to the evolving nature of AI technologies, some of which learn and evolve in real time without human input.

2. Task Force Structure and Approach: The HHS has formed a task force comprising senior members from various agencies within it, such as the Centers for Medicare & Medicaid Services (CMS), the Food and Drug Administration (FDA), and others, to address AI regulation. This task force has established working groups focused on core AI issues like healthcare, biosecurity, and ethics. Their strategy includes monthly meetings, engaging with the private sector for insights, and potentially holding listening sessions to shape a federal strategy on AI governance.

3. Comparison and Existing Efforts in AI Regulation: Unlike the European Union, which has recently passed the AI Act to enforce strict regulations on AI, the U.S. has adopted a more hands-off approach to AI oversight. However, some federal agencies have started leveraging their existing authorities to address AI concerns. For instance, the CMS has applied existing rules to prevent AI misuse in Medicare Advantage plans, and the FDA has an approval process for medical devices using AI, showing initial steps towards a more structured AI governance framework in healthcare and beyond.