Daily Industry Report - March 26

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman, President & COO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Government spending deal keeps health programs near status quo

By Victoria Knight and Peter Sullivan - The latest government funding deal wasn't just stripped of big health policy changes — it also lacks significant raises for a host of federal health agencies. Read Full Article…

VBA Article Summary

  1. Funding Status Quo Maintained Amidst Congressional Gridlock: Amidst a gridlocked Congress, the Department of Health and Human Services (HHS) is set to receive flat funding, avoiding an automatic sequester cut. This decision maintains the current status quo for pandemic preparedness, mental health, biomedical research, and public health efforts, following the elimination of policy "riders" that might have significantly affected hospitals, pharmacy benefit managers, and telehealth services. Meanwhile, a notable exception is the temporary extension for a successful global AIDS program.

  2. Budgetary Allocations and Priorities for Fiscal 2024: The proposed budget agreement, pending approval to avert a partial government shutdown, allocates $116.8 billion to HHS for fiscal 2024, marking a slight increase from the previous year. Notable allocations include $48.6 billion to the National Institutes of Health, with a focus on mental health, Alzheimer's disease, and cancer research. The Centers for Disease Control and Prevention's funding remains unchanged at $9.2 billion, with additional funds earmarked for pandemic preparedness and biodefense.

  3. Implications and Future Legislative Outlook: The budget package reflects a compromise, with pandemic preparedness advocates welcoming the funding levels despite the broader context of stalled legislative action on health issues. The package also includes a $4.3 billion clawback of "unnecessary" COVID-19 funding, a move praised by Republicans but which may affect critical activities such as genomic sequencing and contact tracing. Looking ahead, the resolution of funding uncertainties only lasts until the end of this fiscal year, with potential for more substantial legislative changes being deferred to a post-election "lame duck" session.

HVBA Poll Question - Please share your insights

What is your opinion on RWJBarnabas' decision to drop coverage for GPL-1 medications for weight loss among employees, as reported in the article referenced below?*

Login or Subscribe to participate in polls.

Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question believe PBM practices like spread pricing and increasing hidden fees” is the primary factor contributing to the average 20% increase in pharmacy costs as a percentage of total medical spending for businesses. 

25.13% of respondents believe the primary factor for the increase in pharmacy costs is due to “higher utilization of specialty medications and a lack of resources for discounts on specialty medication,” 23.74% believe it’s due to “increased utilization of prescription drugs,” while 23.49% responded that “rising medication prices” is the main factor. 

Have a poll question you’d like to suggest? Let us know!

Lawmakers seek hearing with UnitedHealth CEO

By Molly Gamble - The Senate Finance Committee is working to secure a hearing with UnitedHealth Group CEO Andrew Witty this spring, The Washington Post reported March 22. Read Full Article…

VBA Article Summary

  1. Senate Inquiry on UnitedHealth's Cyberattack: The U.S. Senate Finance Committee is set to hold an inquiry more than a month after Change Healthcare, a subsidiary of UnitedHealth Group, reported a cyberattack on February 21. This incident, described by the American Hospital Association as "the most significant and consequential incident of its kind against the U.S. healthcare system in history," highlights the urgent need for better cybersecurity measures within the healthcare sector. Although UnitedHealth has confirmed its participation, details regarding the exact date and whether Mr. Witty will attend are not yet confirmed.

  2. Cybersecurity Breach and Response: Change Healthcare was targeted by a cybercrime group known as ALPHV/Blackcat, who executed the attack through ransomware-as-a-service. This led to significant system outages and disrupted healthcare services. In response to the breach, UnitedHealth Group has been working on creating accelerated payment systems and finding workarounds to support ongoing system recovery efforts. Federal agencies have also initiated an investigation into the incident, issued warnings to hospitals about potential cyber threats, and provided additional support for Medicaid payments.

  3. Legislative Action and Accountability: During a discussion on the proposed 2025 budget for the Department of Health and Human Services (HHS), Senate Finance Chairman Ron Wyden emphasized the need for accountability and stronger cybersecurity standards in the healthcare industry. He criticized the existing practice of allowing private companies to set their own cybersecurity standards and highlighted the unpreparedness of both UnitedHealth Group and federal agencies for the cyberattack on Change Healthcare. Mr. Wyden advocates for mandatory cybersecurity standards, greater penalties for compliance violations, and holding negligent CEOs accountable to enhance patient protection and national security.

Hospital groups question HHS about data breach reporting after Change attack

By Susanna Vogel - Change has yet to say whether protected health information was compromised during the Feb. 21 cyberattack, which the AHA has called “the most significant and consequential” of its kind against the industry in its history. Read Full Article…

VBA Article Summary

  1. Clarification on Data Breach Notifications: Hospital lobbying organizations, specifically the American Hospital Association (AHA) and the Federation of American Hospitals, requested clarification from the HHS' Office for Civil Rights (OCR) regarding who is responsible for notifying patients of data breaches following a cyberattack on UnitedHealth’s Change Healthcare. They argued that the responsibility should lie solely with UnitedHealth and Change, to prevent duplicate notifications and avoid public confusion and stress.

  2. OCR's Investigation and Legal Obligations: The OCR began an investigation on March 13 into whether protected health information was compromised in the cyberattack and if UnitedHealth complied with legal requirements to safeguard health data. While the OCR's primary focus is not on healthcare providers, health plans, and business associates, it reminded these entities of their legal obligations to report any data breaches to the HHS and affected individuals.

  3. Impact of the Cyberattack and Concerns Over Cybersecurity Requirements: The cyberattack on Change Healthcare has caused operational difficulties for hospitals, impacting financial operations and patient care. Ninety-four percent of hospitals surveyed reported financial impacts. Concerns have been raised about the potential for increased cybersecurity reporting requirements and penalties for HIPAA violations, with the AHA opposing mandatory cybersecurity requirements that could lead to fines, arguing that such measures would be counterproductive and reduce resources available for fighting cyber crime.

Humana wants Medicare Advantage AI lawsuit thrown out

By Rylee Wilson - Humana is seeking to dismiss a class action lawsuit alleging the insurer used an AI algorithm to wrongfully deny Medicare Advantage beneficiaries care. Read Full Article…

VBA Article Summary

  1. Motion to Dismiss Filed by Humana's Lawyers: Lawyers for Humana, a Louisville, Ky.-based insurer, filed a motion in U.S. District Court in the Western District of Kentucky on March 20 to dismiss a lawsuit brought by two of its Medicare Advantage beneficiaries. The plaintiffs allege that Humana used an AI tool named nH Predict, owned by UnitedHealth Group, to deny coverage for post-acute care. Humana's legal team argues that the plaintiffs have not exhausted all appeal options available to them and are inappropriately using a combination of state laws instead of federal Medicare standards to base their case.

  2. Contention over the Use of AI in Coverage Decisions: The lawsuit centers on the claim that Humana utilized nH Predict to make coverage determinations, a point contested by UnitedHealth Group, which owns the tool. UnitedHealth asserts that nH Predict is employed as a guide to assist in informing providers, families, and caregivers about the necessary care for patients, both during their facility stay and post-discharge, emphasizing that coverage decisions adhere to CMS criteria and the specific terms of the member's plan. Humana's defense also highlights that the lawsuit appears to be substantially similar to another lawsuit filed by the same law firm against a different Medicare Advantage Organization, suggesting a lack of originality in the plaintiffs' legal approach.

  3. Humana's Stance on the Allegations: A spokesperson for Humana has publicly defended the company's position, stating a commitment to vigorously defend against what they describe as "baseless allegations of wrongdoing" in the lawsuit. They further argue that the allegations of Humana using artificial intelligence to make coverage decisions without human intervention are unfounded. Humana insists that the coverage decisions challenged in the lawsuit were thoroughly reviewed and upheld at every administrative level sought by the plaintiffs, suggesting a strong belief in the company's compliance with necessary standards and the meritless nature of the claims against them.

Can you really go blind watching a solar eclipse? Real life cautionary tales.

By Eduardo Cuevas - When the ophthalmologist looked into a 26-year-old's eye in 2017, it was a worst-case scenario. The distinctive contours of the solar eclipse the woman stared at days prior were etched onto her retina. Read Full Article…

VBA Article Summary

  1. Rare and Notable Case of Eye Damage: A Staten Island woman experienced significant retinal damage after watching a solar eclipse through what she believed were protective glasses. Her injury was unique enough to be documented by doctors from Mount Sinai's New York Eye and Ear Infirmary in JAMA Ophthalmology. This case highlights the rare but real risk of eye damage from direct sunlight during an eclipse, emphasizing the importance of verified protective eyewear. The woman's retinal scans showed damage in the shape of a partial eclipse, and she reported seeing a crescent moon shape, similar to Pac-Man, when closing her eyes.

  2. Importance of Proper Protection During Eclipses: The incident underscores the critical need for proper eye protection when observing solar eclipses. Experts stress that looking at the sun without appropriate eclipse glasses or using counterfeit or inadequate protection can lead to permanent retinal damage. This is because the moon's shadow during a partial eclipse allows individuals to stare at the sun longer without squinting, exposing their eyes to high-energy rays capable of damaging the retina. The American Astronomical Society and medical professionals recommend using verified glasses that meet the international standard of ISO 12312-2 for safe eclipse viewing.

  3. Educational Outreach and Public Safety Measures: In light of the upcoming 2024 solar eclipse, which will pass over several large cities in the U.S. and Mexico, eye health professionals and the American Astronomical Society are urging the public to take precautions to prevent eye damage. They advocate for watching the eclipse on TV or using indirect viewing methods like pinhole projections. This push for public awareness stems from experiences like that of the Staten Island woman and historical cases of eye damage during eclipses, emphasizing the need for education and the use of proper protective measures to enjoy such celestial events safely.

Medicare Advantage gets walloped in the press as the federal government's rate notice looms

By Wendell Potter - In the next week or so, the federal government will announce a decision that will clue us in on whether big health insurers that run the private Medicare Advantage program will have once again succeeded in browbeating regulators into giving them billions more of our money than they’re lawfully entitled to. Read Full Article…

VBA Article Summary

  1. Medicare Advantage Payment Debate Intensifies: The Center for Medicare and Medicaid Services (CMS) has proposed a 3.7% revenue increase for Medicare Advantage (MA) plans in 2025, sparking controversy. Insurers, claiming the increase is actually a cut, warn of higher premiums and reduced benefits. This annual negotiation has gained public attention, notably with a high-profile ad during the Super Bowl by the Better Medicare Alliance, urging viewers to protest against the proposed changes.

  2. Research and Media Challenge Industry Claims: A team from Brown University and Georgia State provides a counter-narrative to the insurers' claims of financial cuts, highlighting that the proposed increase, while smaller than in some previous years, does not significantly affect MA plans' high profit margins. This perspective is supported by investigative journalism from outlets like STAT News and KFF News, which have scrutinized the financial implications of Medicare Advantage plans and their impact on taxpayer money.

  3. Public and Advocacy Group Pushback: Unlike in previous years, 2024 has seen a notable increase in public and advocacy group engagement on this issue, with organizations like Public Citizen and the Center for Medicare Advocacy voicing opposition to the insurance industry's pressure tactics. This year, the CMS's decision-making process on MA payments is under significant scrutiny, with many calling for the administration to resist industry demands and prioritize taxpayer and beneficiary interests.

Dozens of health systems ask CMS to crack down on Medicare Advantage denials

By Rylee Wilson - Over 100 hospitals, health systems and providers signed on to a call for CMS to do more on Medicare Advantage denials. Read Full Article…

VBA Article Summary

  1. Request for Enhanced Data Collection and Enforcement: Members of Premier, a healthcare services company, addressed a letter to CMS administrator Chiquita Brooks-LaSure, urging for increased data collection on denied claims by Medicare Advantage (MA) plans and calling for enforcement actions against those not adhering to Medicare's coverage rules. This came after a Premier survey revealed that 15.7% of Medicare Advantage claims were denied, slightly higher than the 15% denial rate for claims to private payers, highlighting concerns over compliance and the need for transparency in MA plans' operations.

  2. Appeal Costs and Administrative Burden: The survey conducted by Premier pointed out the significant administrative burden hospitals face when appealing denied Medicare Advantage claims, with an average cost of $47.77 per appeal. This underscores the financial strain on healthcare providers and the inefficiencies in the current system, prompting Premier's member hospitals and health systems to call for CMS to monitor MA plans' spending on direct patient care to mitigate potential negative impacts on Medicare beneficiaries and providers.

  3. Advocacy for Patient-Centered Reforms: Premier's letter to CMS included recommendations to ensure Medicare Advantage plans adhere more closely to patient care standards, such as preventing MA plans from unjustly delaying or denying claims already approved through electronic prior authorization and placing greater emphasis on patient experience in MA plan ratings. The collective plea from dozens of health systems, including notable names like CommonSpirit Health and Ascension, reflects growing dissatisfaction among hospital executives with the Medicare Advantage program, particularly concerning the obstacles posed by prior authorization and delayed payments, leading some to reconsider their participation in the program.

Exercise Helps Women Cope With Advanced Breast Cancers

By Dennis Thompson and Carole Tanzer Miller - Exercise can help women better cope with the rigors of advanced breast cancer, a new study says. Read Full Article…

VBA Article Summary

  1. Improvement in Patients' Well-being: Researchers at the European Breast Cancer Conference in Milan, Italy, presented evidence that a regular exercise program significantly benefits patients with advanced breast cancer. The study highlighted that participants experienced less pain and fatigue, along with an improved quality of life. This outcome supports the integration of exercise into the treatment plans for patients with metastatic breast cancer, as emphasized by Anouk Hiensch, an assistant professor of epidemiology and health economics at the University Medical Center Utrecht in The Netherlands.

  2. Study Details and Recommendations: The research involved 357 patients with advanced breast cancer from various countries, who were divided into two groups. One group underwent a nine-month exercise regimen alongside their cancer therapy, while the other received standard cancer care. The exercise program was personalized, focusing on resistance, aerobic, and balance exercises, with an encouragement for daily physical activity. The study found significant improvements, especially in younger women and those who initially reported more pain. Hiensch recommends supervised exercise for all patients with metastatic breast cancer, suggesting it as a critical component of standard care.

  3. Acknowledgment of Exercise's Role in Cancer Care: The findings underscore the potential of exercise in enhancing the quality of life for patients with metastatic breast cancer, who often face a declining quality of life despite living longer due to continuous treatments. The research suggests that exercise, by reducing inflammation, can be a supportive care strategy to improve patients' lives. The chair of the European Breast Cancer Conference, Dr. Michail Ignatiadis, hailed the study as good news, emphasizing the importance of incorporating exercise into the treatment and care package for patients with advanced breast cancer to ensure the best possible quality of life.

Illinois House committee passes Gov. Pritzker’s proposed health insurance reforms

By Max Cotton - Illinois Gov. JB Pritzker’s proposed health insurance reforms are one step closer to becoming law. The state House Human Services Committee passed the bill Thursday overhauling certain parts of the health insurance system in Illinois. The party-line vote was 6-3 with all Democrats voting for it and all Republicans opposing the legislation. Read Full Article…

VBA Article Summary

  1. Ban on Step Therapy and Prior Authorization: Governor Pritzker's proposed bill aims to eliminate "step therapy," a practice where insurance companies require patients to attempt and fail alternative medications before covering the prescribed ones. Furthermore, it seeks to prohibit prior authorization for mental health care, ensuring quicker access to necessary treatments. Insurance companies would also be mandated to publicly list all procedures that require prior authorization, enhancing transparency and patient autonomy in healthcare decisions.

  2. Prohibition of "Junk Plans" and Introduction of Rate Review System: The legislation intends to ban the sale of inadequate insurance plans, often referred to as "junk plans," that offer minimal coverage. This move is designed to protect consumers from being misled by plans that fail to provide sufficient healthcare coverage. Additionally, the bill proposes the implementation of a rate review system for large group insurance plans, enabling closer scrutiny when insurers propose premium increases. This mechanism aims to balance the financial aspects of healthcare provision with the need for comprehensive patient care.

  3. Collaborative Efforts for Reform and Legislative Process: State Rep. Anna Moeller, the House sponsor of the bill, highlighted the collaborative efforts between the governor's office, healthcare professionals, and the insurance industry to refine the bill's language. This cooperation underscores the broad consensus on the necessity of reforming insurance practices to prioritize patient and doctor decision-making in healthcare. Moeller's commitment to introducing an amendment to the bill before the House Human Services Committee signifies the ongoing legislative process and the importance of stakeholder engagement in shaping healthcare policies.

GSK to cap out-of-pocket inhaler costs in US

By Reuters - British pharmaceutical giant GSK (GSK.L), opens new tab said on Wednesday it would cap out-of-pocket costs for all its inhaled asthma and chronic lung disease medicines at $35 per month for eligible patients in the United States, following similar moves by two of its rivals. Read Full Article…

VBA Article Summary

  1. Implementation of Cost Cap by GSK: GSK announced that starting January 1, 2025, a cost cap would be applied to all its asthma and chronic obstructive pulmonary disease (COPD) medications, including Advair Diskus, Advair HFA, and Trelegy Ellipta. This measure is designed to ensure that patients, whose monthly costs currently exceed $35, will not have to pay more than this amount.

  2. US Lawmakers' Critique and Investigation: In January, US lawmakers criticized the top four inhaler manufacturers—AstraZeneca, Boehringer Ingelheim, Teva Pharmaceuticals, and GSK—for their high prices in the United States compared to other countries. An investigation was launched focusing on the pricing strategies of these companies, noting significant price disparities such as GSK's Advair HFA costing $319 in the US and $26 in the UK.

  3. Industry-wide Response to Price Caps: In response to the criticism and following the industry trend, GSK reduced the wholesale acquisition cost for Advair Diskus and Advair HFA significantly, by an average of 50% and 20%, respectively. Prior to GSK's announcement, AstraZeneca and Boehringer Ingelheim had already committed to capping out-of-pocket expenses for their inhaled respiratory products at $35 per month in the US, starting June.