HHS seeks input from payers on Change cyberattack response

By Jeff Lagasse - U.S. Department of Health and Human Services Secretary Xavier Becerra and Deputy Secretary Andrea Palm convened a meeting of payers on Monday to discuss actions they could take to mitigate the harm caused by the Change Healthcare cyberattack. Read Full Article…

VBA Article Summary

1. Government and Health Sector Collaboration on Cybersecurity: Following a cyberattack on Change Healthcare, key figures including White House Domestic Policy Advisor Neera Tanden, Deputy National Security Advisor for Cyber and Emerging Technologies Anne Neuberger, and HHS officials collaborated closely with the private sector. They reviewed actions taken by payers to assist healthcare providers in resolving issues stemming from the cyberattack. The meeting emphasized the need for continued cooperation between the government and private sector to support healthcare providers, especially those serving vulnerable populations and in rural areas, by improving claims processing and ensuring timely care delivery.

2. Cybersecurity Measures and Financial Support: The meeting highlighted the interconnectedness of the healthcare ecosystem and the urgency of strengthening cybersecurity resilience. Neuberger urged insurers to implement HHS' voluntary Cyber Performance Goals and to support third-party certification of cybersecurity measures. Additionally, there was a call for insurers to make targeted advanced payments to healthcare providers facing cash flow issues due to the cyberattack, with a particular focus on small, rural, and safety-net providers.

3. Response to the Cyberattack and Efforts to Mitigate Impact: In response to the cyberattack on Change Healthcare, federal agencies and the private sector have taken various actions. These include the issuance of guidelines for accelerated and advance payments, surveys to assess the impact on healthcare providers, and an investigation by HHS' Office of Civil Rights. Furthermore, there were efforts to reopen application processes for payment adjustments and introduce state Medicaid flexibilities to support affected providers. The incident has also led to increased vigilance against scams exploiting the situation, as reported by the Minnesota Hospital Association and the Minnesota Attorney General's office.

Drugmakers give surprising response to Medicare drug price offers

By Joseph Choi - Pharmaceutical executives have given surprisingly optimistic reactions to initial offers from Medicare in drug price negotiations, signaling a break from industry lawsuits that warn of dire consequences from the program. Read Full Article…

VBA Article Summary

1. Secret Negotiations and Speculations: The Centers for Medicare and Medicaid Services (CMS) initiated a negotiation process with drugmakers as part of President Biden’s Inflation Reduction Act, aimed at reducing drug prices for Medicare. While specific figures have not been disclosed, some pharmaceutical executives have hinted at a modest impact on prices. Despite this, there are concerns among patient groups that these statements might be more about appeasing investors than signaling real change. The process has seen drug companies, including Pfizer and AstraZeneca, engaging in negotiations while simultaneously suing to stop these discussions, reflecting their complex stance of balancing legal obligations, investor reassurances, and the potential for innovation and profit maximization.

2. Judicial Rulings and Advocacy Positions: Drug affordability advocates and the judiciary have shown skepticism towards the pharmaceutical industry's claims of harm due to the negotiation program. Federal judges have dismissed lawsuits from drug companies, indicating that the alleged harms are not substantiated enough to warrant legal action. Advocates emphasize that even modest price reductions can significantly benefit Medicare recipients, challenging the narrative of detrimental financial impact on pharmaceutical companies. This skepticism extends to the broader debate on drug pricing and the credibility of pharmaceutical companies in influencing health care policies.

3. Projected Savings and Policy Implications: Despite the ongoing legal battles and public relations efforts by pharmaceutical companies, analyses and projections suggest that the negotiation efforts will yield substantial savings for Medicare and potentially reduce the federal deficit. Advocates argue that the savings will not only benefit Medicare beneficiaries by lowering out-of-pocket costs but also apply downward pressure on premiums. The situation underscores a broader discussion on the role of drug pricing in national health care policy and the potential shift in power dynamics between pharmaceutical companies and policymakers, emphasizing the importance of transparent and effective negotiations in achieving cost reductions.

FTC to send nearly $100 million in refunds to customers of Benefytt's fake health plans

By Anne Marie Lee - The Federal Trade Commission is sending refunds to consumers it says bought into fake health plans falsely marketed by Benefytt Technologies as comprehensive health insurance or an Obamacare plan under the Affordable Care Act. Read Full Article…

VBA Article Summary

1. Fraudulent Practices and Settlement: Benefytt, also known as Health Insurance Innovations, engaged in deceptive practices by marketing and selling fraudulent health insurance policies through aggressive tactics and misleading websites. This led to consumers, including seniors, purchasing worthless insurance plans that resulted in high monthly fees and substantial medical bills under the false impression of being covered. Following the FTC's complaint in August 2022, Benefytt agreed to a settlement that includes paying approximately $100 million for customer refunds and imposes a permanent ban on its former CEO and vice president from selling or marketing any health care-related products.

2. Customer Impact and Refund Eligibility: Benefytt's deceptive insurance policies left customers facing hundreds of dollars in monthly charges and unexpected large medical expenses. In response, the FTC has initiated refunds to 463,629 customers who paid $1,000 or more to Benefytt between 2017 and 2022, recognizing the financial burdens these practices placed on affected individuals. The settlement aims to mitigate some of the financial damage incurred by these consumers.

3. Refund Process Details: Eligible customers for the refund do not need to file a claim to receive their money back. The FTC is automatically mailing checks to those affected, with the expectation that checks will be delivered within the next two weeks. Recipients are advised to cash or deposit their checks promptly, as they will expire after 90 days. For further information, affected consumers can contact the refund administrator, Epiq Systems, directly. This process is designed to ensure that victims of Benefytt's practices are compensated without the need for additional action on their part.

Updates to ERISA? Payers, hospitals share diverging recommendations with Congress

By Dave Muoio - The Employee Retirement Income Security Act, or ERISA, is turning 50 this year and lawmakers are curious to hear about how the law could be updated to increase coverage affordability and care access. Read Full Article…

VBA Article Summary

1. Divergent Priorities between Payers and Providers: The article highlights a significant divide in the priorities of payers and providers in response to the House Committee on Education and the Workforce’s request for information on federal guidelines for employee benefit plans. The ERISA Industry Committee (ERIC) emphasizes the need for strengthened ERISA preemption to limit state-level mandates' impact, aiming to maintain national uniformity and ease the administrative burden for multi-state employers. On the other hand, the American Hospital Association (AHA) focuses on the negative effects of corporate health insurers' vertical consolidation and practices that prioritize profits over patient care, advocating for increased oversight and prevention of manipulative practices like MLR manipulation.

2. Concerns Over State-Level Mandates and Vertical Consolidation: ERIC's response primarily addresses the growing state and local laws that impose additional requirements on benefits design and coverage, which they argue could disadvantage employees and raise health benefits costs. They advocate for clarity and flexibility in plan administration, including electronic communication, PBM transparency, and cybersecurity practices. Conversely, AHA critiques the vertical consolidation of insurers and their in-house PBMs, suggesting that such consolidation leads to self-dealing, manipulates medical loss ratios (MLR), and undermines patient care, calling for stricter oversight and regulation to prevent insurers from enriching themselves at the expense of beneficiaries.

3. Legislative Recommendations and Cybersecurity Consensus: Both ERIC and AHA offer specific legislative recommendations to address their concerns, with ERIC supporting bills that aim to increase PBM accountability and transparency, and AHA urging policymakers to increase MLR oversight for vertically integrated insurers. Interestingly, both groups converge on the topic of cybersecurity, suggesting that current standards under HIPAA are appropriate and cautioning against overly prescriptive government standards within ERISA, advocating for a uniform standard across the country. Additionally, AHA recommends against further legislative action on price transparency, arguing that current measures are sufficient and additional legislation could complicate providers' ability to offer meaningful price estimates.

Mental health-related worker absences increased by a third last year, research finds

By Alan Goforth - The frequency of employees missing work because of mental health issues is surging. Absences increased by one-third from 2022 to 2033 and by 300% between 2017 and 2023. Read Full Article…

VBA Article Summary

1. Predominance of Female Employees in Mental Health-Related Leaves: Research by ComPsych in 2023 revealed that nearly 7 in 10 mental health-related leaves of absence were taken by women, with millennial women constituting one-third of these leaves. This trend underscores the importance for HR teams to focus on resources and programs that address the unique challenges faced by female employees, especially those belonging to millennial and Gen X demographics. Dr. Richard A. Chaifetz emphasized the need for HR interventions targeting the specific stressors for these groups, such as team management pressures, homebuying stress, adjustments post-parental leave, and concerns over elder care.

2. Vulnerability of Younger Generations to Mental Health Challenges: Gen Z employees, marking their entry into the workforce with a distinct set of priorities and work approach, have been identified as particularly vulnerable to mental health issues. This generation places a significant emphasis on personal well-being, leading to a higher propensity for taking mental health-related time off work. Statistics from the Resolution Foundation indicate that individuals aged 18 to 24 exhibit higher rates of mental health symptoms, including depression, anxiety, and bipolar disorder, compared to older generations.

3. Mental Health Issues as Predominant Workplace Injuries and Economic Impact: A study by Atticus highlights that stress and anxiety have become the most common workplace injuries, with 43% of middle managers reporting burnout—a higher rate than any other worker group. Additionally, the World Health Organization reports that depression and anxiety lead to the loss of 12 billion working days annually, costing the global economy $1 trillion. These findings suggest a critical need for HR departments to proactively invest in mental health resources and initiatives as a strategy to mitigate the financial and operational impacts of employee mental health issues on organizations.

Drugmaker Sued for…Overpaying for Drugs? Lawsuit Ushers in Expected Wave of Welfare Fiduciary Litigation

By Benjamin J. Conley and Sam M. Schwartz-Fenwick - In early February, pharmaceutical giant Johnson & Johnson (J&J) and its benefit plan committee were sued in a putative class action alleging the company breached its fiduciary duty in its selection of its pharmacy benefit manager (PBM), its reliance on a biased consultant in the selection process, and its failure to negotiate more participant-friendly contract terms in implementing the services. Read Full Article…

VBA Article Summary

1. Decades of Litigation Over Retirement Plan Fees: Since 2006, 401(k) and 403(b) retirement plans have faced numerous class action lawsuits. These legal challenges focus on the fiduciary duties related to selecting vendors, managing fees, and ensuring satisfactory investment performance, with several cases reaching the U.S. Supreme Court. This ongoing litigation trend highlights the scrutiny over how retirement plans manage and disclose fees, impacting both plan participants and fiduciaries.

2. Introduction of New Transparency Laws for Welfare Plans: The Consolidated Appropriations Act (CAA), passed by Congress in late 2020, introduced significant reporting and disclosure requirements aimed at enhancing transparency within the medical and prescription drug industries. It mandated health plans to disclose payment rates, create cost estimator tools, document processes for mental health service access, and solicit fee disclosures from brokers and consultants. This move towards transparency reflects a growing demand for accountability and clarity in how health plans operate and interact with providers and beneficiaries.

3. Shift Towards Welfare Plan Fee Litigation and Allegations Against J&J: A recent shift in legal focus has seen welfare plans sue third-party administrators over issues like undisclosed pricing and inflated costs. Prominent ERISA plaintiff's attorney Jerry Schlichter signaled a pivot to welfare plan fee litigation, naming several companies as potential targets. A lawsuit against J&J for alleged fiduciary breaches in their prescription drug program typifies this new wave of litigation. The suit criticizes J&J for not considering non-traditional PBMs, failing to negotiate favorable pricing, and not separating specialty pharmacy services, suggesting a broader trend of legal challenges centered on the management and transparency of plan fees.

CMS unveils person-centered primary care model but excludes high-revenue ACOs

By Noah Tong - The Centers for Medicare & Medicaid Services (CMS) has announced the ACO Primary Care Flex Model (ACO PC Flex Model), allowing eligible accountable care organizations to treat people with with Medicare using person-centered proactive care. Read Full Article…

VBA Article Summary

1. Introduction of the ACO Primary Care Flex Model: The new model provides a one-time advanced shared savings payment and monthly prospective primary care payments to Accountable Care Organizations (ACOs), targeting particularly low revenue ACOs within the Medicare Shared Savings Program (MSSP). This approach aims to offer the necessary flexibility and resources for ACO formation and administrative operations, supporting the improvement of primary care services and incentivizing the transition to value-based care over traditional fee-for-service models.

2. Goals and Benefits: The model is designed to enhance primary care funding, thereby expected to create savings in total care costs and address health disparities. It encourages the adoption of preventive health services and screenings, improving chronic care management. Special considerations are given to rural health clinics and federally qualified health centers to ensure access to care for underserved populations. The model also aims to incentivize greater participation in ACOs, with prospective payments calculated based on county-average spending to ensure fair and adequate funding.

3. Industry Response and Future Directions: The model has been met with positive feedback from various healthcare organizations, praising its potential to provide stable revenue and support comprehensive, team-based care. However, there are calls for the CMS to reconsider the exclusion of high-revenue ACOs to avoid market distortions and ensure that independent primary care practices can benefit from these innovations. The voluntary program is set to begin on January 1, 2025, and plans to select around 130 ACOs for participation, with the aim of testing its effectiveness in fostering a more efficient and equitable healthcare system.

The '3rd generation' of weight loss drugs

By Paige Tweeter - Anita Courcoulas, MD, defines GLP-1s as "generation one;" dual GLP-1 and GIPs as the second; and a triple threat of GLP-1, GIP and GCGRs as the third generation of weight loss drugs. Read Full Article…

VBA Article Summary

1. Generations of Weight Loss Drugs: Dr. Anita Courcoulas, chief of UPMC's minimally invasive bariatric and general surgery program, outlines three generations of anti-obesity medications. The first generation includes GLP-1 receptor agonists, such as Byetta, which was FDA-approved in 2005 primarily for Type 2 diabetes and has seen a surge in popularity for weight management. The second generation comprises dual GLP-1 and GIP receptor agonists, like Mounjaro and Zepbound from Eli Lilly, offering more significant weight loss outcomes of 20% to 22%. The third, and most advanced, involves a combination of GLP-1, GIP, and glucagon receptors (GCGRs), currently in phase 3 trials, with Eli Lilly's retatrutide showing a 24.2% weight reduction after 48 weeks, indicating promising future advancements in pharmacological weight management.

2. Comparisons to Surgical Outcomes: The progress in pharmacological solutions for obesity is now mirroring the weight loss outcomes traditionally achieved through bariatric surgeries such as gastric sleeve and bypass procedures. Dr. Courcoulas notes that these surgeries result in substantial weight loss, with gastric sleeve operations leading to a 20% to 25% sustained loss and gastric bypass up to 30% over time. The emerging drug therapies are approaching these benchmarks, with late-stage trials showing efficacy especially in individuals with higher initial weights, suggesting a significant shift in managing obesity through medication.

3. Future Prospects and Concerns: While the advancements in weight loss medications are promising, Dr. Courcoulas emphasizes the unknown long-term durability of these treatments, echoing concerns within the bariatric field. Despite this, the potential approval and market introduction of GLP-GIP-GCGR medications, possibly next year, hold substantial promise for enhancing weight loss outcomes. This evolving landscape of anti-obesity medications is expected to offer more effective solutions for individuals needing significant weight management, potentially surpassing the results of current drug classes and offering new hope to those battling obesity.

What Ozempic can teach CFOs about drug costs

By Graison Dangor - For CFOs trying to limit spikes in operating expenses, keeping healthcare costs in check might feel like trying to alter a law of nature. The sun rises in the east. Birds fly south for winter. Spending on healthcare outpaces inflation. Read Full Article…

VBA Article Summary

1. Rising Demand and Impact on Corporate Healthcare Costs: The escalating demand for weight-loss injections like Zepbound and Wegovy, and the diabetes medications Mounjaro and Ozempic prescribed off-label for obesity, is significantly raising employers' healthcare costs, particularly prescription drug spending. This trend is expected to continue as more employers cover these medications, further straining corporate budgets and making the role of CFOs in managing benefits costs more critical.

2. Challenges in Negotiating Drug Prices: Corporations find it nearly impossible to negotiate lower prices for these high-demand drugs due to the overwhelming bargaining power of Pharmacy Benefit Managers (PBMs). Even the smallest major PBM manages medication for tens of millions, dwarfing any bargaining power a single employer might have. This lack of leverage leaves CFOs and benefits decision-makers to explore other strategies to mitigate rising costs without compromising on care standards or employee benefits competitiveness.

3. Strategic Responses and Recommendations for Employers: To counterbalance the spiraling costs, some employers, especially those with self-funded plans, are adopting a "yes-with-conditions" approach. This involves setting specific eligibility criteria for expensive treatments, such as requiring unsuccessful attempts with more affordable treatments and adherence to health improvement programs. Furthermore, integrating anti-obesity medications with a broader health and wellness strategy focused on prevention and specialized care is recommended to not only manage costs but also enhance long-term employee health outcomes.

Life insurance premium growth sets another record in 2023, LIMRA finds

By Staff Reports - For the third consecutive year, total life insurance new annualized premium set a new sales record, rising 1% to $15.7 billion, according to LIMRA’s U.S. Life Insurance Sales Survey. Read Full Article…

VBA Article Summary

1. Pandemic-Driven Digital Transformation Boosts Sales: The COVID-19 pandemic acted as a catalyst for life insurers to accelerate their digital transformation efforts, leading to an improved process for purchasing life insurance and enhancing the customer experience. These changes, along with a strong economy and heightened consumer interest, have significantly contributed to the growth in life insurance sales in 2023. John Carroll, senior vice president and head of Life & Annuities at LIMRA and LOMA, attributes this growth to the pandemic-induced digitization and predicts a normalization in life insurance sales growth, projecting up to a 5% increase in 2024 and 2025.

2. Product-Specific Sales Trends and Forecasts: In the life insurance market, different products experienced varied trends in sales performance. For instance, whole life insurance saw a slight increase in new premiums and policy counts in 2023, with expectations of further growth in the coming years. Term life insurance also exhibited growth, benefiting from economic conditions like moderated inflation and low unemployment rates. Indexed and variable universal life products reported significant premium growth, with the latter seeing the largest increase in premium growth in the fourth quarter of 2023. However, fixed universal life insurance experienced a decrease in new premiums and policy counts, with forecasts indicating a continuing decline.

3. Market Share and Future Outlook: Whole life insurance held the largest market share by premium in 2023, followed by indexed universal life, variable universal life, and term life insurance, respectively. Despite facing potential risks such as inflation and unemployment, the life insurance market overall has shown resilience and growth. LIMRA's forecasts indicate optimistic growth rates for most life insurance products over the next two years, except for fixed universal life, which is expected to see a significant drop in premiums. The insights are based on a LIMRA survey covering 85% of the market, offering a comprehensive overview of the industry's performance and future prospects.