Daily Industry Report - March 27

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)

As House Republicans Release Budget to Increase Health Care Costs and Take Away Coverage, President Biden and Vice President Harris…

By White House Documents & Publications (DC) - Fact Sheet: As House Republicans Release Budget to Increase Health Care Costs and Take Away Coverage, President Biden and Vice President Harris Fight to Lower Health Care Costs and Protect and Strengthen the ACA, Medicaid, and Medicare Read Full Article…

VBA Article Summary

  1. Republican Budget Proposals Threaten Access to Healthcare for Millions: House Republicans aim to slash $4.5 trillion from programs like the Affordable Care Act (ACA), Medicaid, and the Children's Health Insurance Program, potentially depriving millions of Americans of essential health coverage. The proposed budget would jeopardize coverage for over 45 million individuals enrolled in ACA and Medicaid expansion programs, while turning Medicaid into block grants, risking access to care for an additional over 60 million Americans. Seniors and people with disabilities relying on Medicaid home care services could face cuts or loss of care, while critical consumer protections provided by the ACA would be eliminated, leaving vulnerable populations at the mercy of insurance companies.

  2. Contrasting Visions: President Biden and Vice President Harris' Plan for Affordable Healthcare: President Biden and Vice President Harris advocate for healthcare as a fundamental right, aiming to protect and strengthen the ACA to lower healthcare and prescription drug costs and expand coverage. Under their leadership, a record-breaking 21 million Americans have signed up for ACA coverage, with efforts to save individuals an average of $800 per year on health insurance premiums. Their vision includes making permanent the expanded premium tax credits, closing the coverage gap in states without Medicaid expansion, ensuring children's coverage, and investing in home care and mental health services.

  3. Future Steps to Lower Costs and Improve Access to Healthcare: President Biden and Vice President Harris plan to further lower prescription drug costs and health insurance premiums, expand access to mental health care, and protect consumers from corporate exploitation.Proposed measures include negotiating drug prices for at least 50 drugs annually under Medicare, capping out-of-pocket prescription drug costs for everyone, and strengthening Medicare for future generations by making the wealthy pay their fair share and dedicating savings to the Medicare Trust Fund.

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?*

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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. 

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The federal government will soon announce its payment rates and policy changes for the Medicare Advantage program. Here's how you can influence their decision.

By Wendell Potter - The story we published…about how big insurers are pressuring the Center for Medicare and Medicaid Services to give them a big raise next year included a long list of news reports over the past year about the many disadvantages of Medicare Advantage, not just to seniors and disabled Americans but also to health care providers and taxpayers. Read Full Article…

VBA Article Summary

  1. Financial Mismanagement and Overbilling: Medicare Advantage, operated predominantly by large for-profit insurers, has been criticized for overbilling taxpayers by as much as $140 billion annually. This egregious sum could otherwise fund essential services like dental, hearing, and vision care for all Medicare and Medicaid enrollees, while also reducing out-of-pocket expenses for Medicare beneficiaries to a maximum of $5,000 per year. Such financial practices underscore a significant misuse of taxpayer dollars, demanding urgent reform to prevent further waste.

  2. Limited Access and Poor Health Outcomes: A substantial portion of Medicare Advantage plans severely restrict patient access to healthcare providers, with 35% of enrollees in plans that cover less than 30% of physicians in their area. This limitation disproportionately impacts rural communities and has been linked to poorer health outcomes, including delayed cancer treatments and higher post-operative mortality rates among cancer patients, compared to those covered by traditional Medicare. These findings highlight the critical need for policy interventions to ensure equitable and timely access to quality healthcare services.

  3. Deceptive Marketing Practices and Fraudulent Claims: The aggressive marketing tactics employed by Medicare Advantage plans often mislead vulnerable seniors, as evidenced by a 2022 report from the US Senate Committee on Finance. Additionally, a significant number of the largest Medicare Advantage insurers have been implicated in submitting inflated claims to maximize profits, with several facing federal lawsuits for fraudulent activities. This pattern of behavior not only exploits seniors but also contributes to the unsustainable financial burden on the Medicare system, reinforcing the call for comprehensive regulatory oversight and accountability.

Healthcare Data Strategy in the Age of AI

By Chris Puuri - Right now, the allure of AI is irresistible to every industry — healthcare is no exception. But there is little sense in acquiring a shiny new engine to power a vehicle you do not have. Read Full Article…

VBA Article Summary

  1. Healthcare's Modernization Gap: The article highlights a significant "modernization gap" in the healthcare sector, which affects its ability to fully harness the potential of new technologies like AI. Despite the aspirations to transition to the cloud, digitalize operations, and stay competitive, healthcare lags behind other industries. This is due to a variety of deeply ingrained reasons, including outdated IT infrastructure, stringent compliance and data security requirements, financial constraints, and the critical nature of healthcare services that make resistance to change more about survival than reluctance.

  2. The Role of AI and Strategic Modernization: For healthcare organizations that aim to bridge this modernization gap, AI offers promising capabilities to enhance patient care, improve operational efficiency, and foster innovation. However, realizing these benefits demands a strategic overhaul of IT and data infrastructure. This involves not just adopting new technologies but shifting towards an outcome-focused approach where the return on investment from technology adoption is clearly aligned with improved healthcare delivery and operational outcomes. The article critiques a preoccupation with tools over their practical outcomes, summarizing this mindset with the phrase "tools are for fools."

  3. Data Strategy as the Foundation of AI Adoption: Effective use of AI in healthcare is predicated on a comprehensive data strategy. This encompasses understanding data flows, ensuring secure and compliant data access, and prioritizing data usage over the tools used to manage it. The article emphasizes the importance of evolving data strategies to accommodate cloud-based models, which offer flexibility and cost efficiency over traditional capital expenditures on IT infrastructure. Moreover, healthcare organizations are encouraged to consider a broad spectrum of technology solutions, including those outside traditional vendor relationships, to find the most effective and innovative applications of AI, underscoring the necessity of flexibility and adaptability in healthcare's approach to modernization and technology adoption.

Lack of transparency 'handcuffed' feds' Change hack response, lawmaker says

By Rylee Wilson - Lawmakers are questioning UnitedHealth Group's response to the cyberattack that took Change Healthcare's systems offline for nearly a month. Read Full Article…

VBA Article Summary

  1. Concerns Over Restrictions on Federal Assistance: Rep. Jamie Raskin expressed concerns in his letter to UnitedHealth Group CEO Andrew Witty about the company potentially restricting federal agencies' ability to assist Change Healthcare following a cyberattack. The Cybersecurity and Infrastructure Security Agency reported being "handcuffed" due to a lack of transparency and information from UnitedHealth Group/Change Healthcare.

  2. Request for More Information and a Briefing: In his communication, Mr. Raskin asked for detailed information about the extent of protected health information exposed in the ransomware attack and the company's response to it. He also requested that UnitedHealth Group provide a briefing to the House Oversight Committee staff to further discuss the incident and its implications.

  3. Ongoing Recovery and Legislative Scrutiny: Following the ransomware attack by the group ALPHV/BlackCat on February 21, UnitedHealth Group has been working on restoring its services, with Change Healthcare planning to restore its major clearinghouse platforms and resume processing claims worth $14 billion. The incident has attracted legislative scrutiny, with Rep. Raskin and the Senate Finance Committee seeking to understand the attack's impact and the response better. The federal government has also initiated an investigation into the cyberattack.

80% of nonprofit hospitals' community investments lag their tax savings, Lown Institute finds

By Dave Muoio - Four in 5 nonprofit hospitals are spending less on community benefit areas like financial assistance than what they are estimated to receive in tax breaks, according to the latest annual report from the Lown Institute looking at 2021 IRS filings. Read Full Article…

VBA Article Summary

  1. Evaluating Hospital Contributions: Unveiling the $25.7 Billion Fair Share Deficit: The Lown Institute's evaluation of 2,425 hospitals revealed a collective "fair share deficit" of $25.7 billion, which the think tank believes could address 29% of the U.S. medical debt. Notable hospitals with significant deficits include New York-Presbyterian, UPMC Presbyterian, and NYU Langone, all of which had net incomes over $100 million, indicating a disparity between earnings and community investment.

  2. Nonprofit Health Systems Under Scrutiny: Billions in Deficits Amid High Incomes: The report also identified substantial fair share deficits within nonprofit health systems, with Kaiser Permanente, Providence, and CommonSpirit Health at the forefront, totaling deficits in the billions. It highlighted a concerning trend among nonprofit systems, particularly those with Catholic affiliations, and emphasized the need for regulatory and incentive changes to ensure hospitals fulfill their community benefit obligations.

  3. Calls for Reform: Advocating for Transparency and Accountability in Hospital Spending: Lown Institute calls for enhanced transparency and accountability in hospital reporting and community benefit spending, advocating for reforms including minimum spending thresholds and detailed reporting on financial assistance. The report critiques the effectiveness of current federal regulations and underscores the importance of direct impact spending on community health, excluding expenses such as Medicaid shortfall and research funding from its criteria.

Biden leans into the ACA

By Molly Gamble - President Joe Biden is highlighting the Affordable Care Act in his 2024 campaign as the law turns 14 and after his Republican opponent signaled loose plans for its demise. Read Full Article…

VBA Article Summary

  1. Political Strategy Shift: President Biden's reelection team, responding to renewed calls from former President Trump to repeal the Affordable Care Act (ACA), has pivoted to make the ACA a central focus of the 2024 campaign. This strategic move underscores the significance of healthcare policy in shaping electoral narratives and highlights the ongoing partisan divide over the ACA's future.

  2. Public Advocacy and Historical Context: President Biden, along with former President Obama and House speaker Nancy Pelosi, emphasized the importance of the ACA in protecting healthcare access, particularly for individuals with pre-existing conditions. By revisiting the law's origins and challenges, the Biden campaign aims to evoke the complexities of passing the ACA and the potential consequences of its repeal, resonating with voters on both emotional and practical levels.

  3. Enrollment Milestone and Future Outlook: The ACA continues to play a pivotal role in healthcare coverage, as evidenced by the record-high enrollment of over 20 million individuals in ACA exchange plans for 2024. President Biden and Vice President Harris are leveraging their visit to North Carolina, a crucial battleground state, to underscore their administration's efforts to enhance healthcare affordability and access. Meanwhile, the ACA's enduring legal battles and the mixed public opinion underscore the ongoing debate surrounding its efficacy and future trajectory.

Hospitals Are Adding Billions in ‘Facility’ Fees for Routine Care

By Melanie Evans - Tim Ebel’s visit with an ear, nose and throat specialist at an Ohio clinic last October came to $348. At the same time, he got a second bill for $645. The hospital system that owns the Avon, Ohio, clinic had charged him separately for use of the office where he met his physician. It is what is known as a facility fee, which included overhead for the system’s hospitals though Ebel hadn’t set foot in one. Read Full Article…

VBA Article Summary

  1. Rampant Facility Fees: Hospitals across the United States are increasingly incorporating facility fees into medical bills for routine outpatient care, resulting in significant additional costs for patients. These fees, applied to services like colonoscopies and mammograms, have become pervasive and difficult to avoid, exacerbating the burden of healthcare expenses.

  2. Unjustified Costs: Despite claims by hospitals that facility fees cover additional operational expenses, physicians and economists argue that the added charges do not correspond to enhanced services. In fact, Medicare advisers estimate that these fees have led to overpayments of approximately $6 billion, highlighting the lack of justification for their imposition.

  3. Patient Advocacy and Legislative Action: Faced with unexpected bills and relentless fee hikes, patients like Kelly and Tim Ebel are advocating for fairer healthcare pricing. Legislative efforts, such as those seen in Colorado and Indiana, aim to curb the proliferation of facility fees, reflecting a broader pushback against the healthcare industry's profit-driven practices.

Mental health leaves of absence increase by 33% since last year

By Anson Jones - Following the emergence from the COVID-19-induced hybrid and remote work schedules for many companies, studies show that employees are missing work at a higher rate than normal. A recent study on paid leave reveals a growing trend in the frequency of workers missing work, something employers should be keeping an eye on. Read Full Article…

VBA Article Summary

  1. Rapid Increase in Mental Health-Related Leaves: ComPsych Corporation's recent data highlights a concerning trend, revealing a 33% surge in mental health-related leaves of absence in 2023. This continues an alarming pattern, with a staggering 300% increase over the past six years since 2017.

  2. Gender Disparities in Leave Utilization: Analysis indicates that female employees, particularly millennial and Gen X women, are disproportionately affected by mental health-related leaves of absence. Last year, women accounted for 69% of such leaves, with millennial women alone representing a significant portion at 33%, followed closely by Gen X women at 30%.

  3. Targeted HR Strategies Needed: Dr. Richard A. Chaifetz, CEO of ComPsych, emphasizes the necessity for HR teams to tailor resources and programs to address the specific challenges faced by millennial and Gen X women. Employers are urged to proactively invest in employee mental health through evaluations, surveys, and targeted interventions to mitigate the growing impact and costs associated with employee absences.

Amidst Lawsuits, UnitedHealth Publishes Timeline for Product Restoration

By Pietje Kobus - On March 22, UnitedHealth Group published an estimated timeline for restoring some of its key products. The provided dates are projections the announcement read. Eligibility Processing is expected to be restored the week of March 25, while Clinical Exchange, the workflow enabling prescribing and ordering, is scheduled to be reinstated the following week. Risk Manager is anticipated to be restored during the week of April 8. Read Full Article…

VBA Article Summary

  1. Recovery Efforts and Cybersecurity Restoration: UnitedHealth Group announces the successful rebuilding of Change Healthcare's cloud-based services for medical claims, with Reuters confirming the restoration of Amazon's cloud services. Cybersecurity partners cleared the restored systems, indicating progress in mitigating the effects of the ransomware attack.

  2. Legal Ramifications and Provider Struggles: Healthcare providers, facing severe delays in claims processing and revenue cycle services following the BlackCat ransomware attack, initiate lawsuits against UnitedHealth Group, Optum Inc., and Change Healthcare. Steve Alder highlights the financial strain on providers, pushing many close to bankruptcy due to limited resources.

  3. Cybersecurity Allegations and Legal Actions: Allegations of cybersecurity negligence emerge as healthcare providers seek restitution and improved cybersecurity measures. Complaints and class action lawsuits, such as those from a California therapy group and a Mississippi women's clinic, underscore the fallout from the ransomware attack. UnitedHealth Group's response includes financial assistance to affected providers, while questions remain regarding the nature of compromised data and cooperation with cyber threat actors.

Liraglutide May Ease Peripheral Artery Disease in T2D

By Miriam E. Tucker - In people with type 2 diabetes (T2D) and peripheral artery disease (PAD), liraglutide significantly increased peripheral perfusion over 6 months compared with conventional treatment of cardiovascular risk factors. Read Full Article…

VBA Article Summary

  1. Study Design: The research was an open-label randomized clinical trial conducted over a period from February 1, 2021, to June 30, 2022, with final assessments on December 30, 2022, at a single center in Naples, Italy.

  2. Participant Randomization and Treatment: Fifty-five individuals diagnosed with Type 2 Diabetes (T2D), Peripheral Artery Disease (PAD), and a transcutaneous oxygen pressure (TcPO2) between 30 and 49 mmHg were randomly assigned to receive either 1.8-mg subcutaneous liraglutide (n = 27) or conventional cardiovascular risk factor management (n = 28) for a duration of 6 months.

  3. Clinical Outcomes and Implications: The study found a notable increase in TcPO2 by ≥ 10% from baseline in 89% of participants treated with liraglutide compared to 46% in the control group, indicating a significant improvement in peripheral perfusion. Moreover, several key clinical parameters such as C-reactive protein, urinary albumin, and 6-minute walking distance also demonstrated favorable changes with liraglutide treatment. This suggests a potential for liraglutide to impede the clinical progression of PAD in individuals with T2D.