Nearly 80% of payers prefer vendor-built AI solutions, survey finds

By Cailey Gleeson – Nearly 80% of payers now prefer implementing vendor-built artificial intelligence tools rather than developing internal capabilities, a new survey from Innovaccer found. The survey draws insights from 63 health insurer organization leaders, including regional health plans to national carriers, the healthcare technology and AI company said in a press release. Respondents were polled in mid-December 2025 to mid-January, and include senior and C-suite executives. Innovaccer CEO and co-founder Abhinav Shashank told Fierce Healthcare the shift to outsourced solutions reflects the focus of how to “truly operationalize AI.” Read Full Article...

HVBA Article Summary

1. Preference for Vendor-Built AI Solutions: The majority of payers are opting for vendor-built AI tools rather than developing their own in-house capabilities. This trend is driven by the desire to operationalize AI more efficiently and leverage the expertise of specialized technology providers. Outsourcing AI solutions allows payers to adopt advanced technologies without the significant investment and time required for internal development.

2. Significant Planned Investments in AI: A large proportion of surveyed payers plan to invest heavily in AI over the next three to five years, with many expecting to spend an average of $10 million and some planning to invest at least $20 million. These investments reflect the growing importance of AI in improving care and driving innovation within health insurance organizations. The willingness to allocate substantial budgets underscores the perceived value and urgency of AI adoption in the industry.

3. Infrastructure and Readiness Remain Key Challenges: Despite enthusiasm for AI, most payers acknowledge they are not fully prepared to implement AI at scale due to limitations in data infrastructure and interoperability. Legacy systems and data silos are cited as major barriers, making it difficult to fully realize the benefits of AI technologies. Addressing these foundational issues is seen as essential for payers to achieve successful and scalable AI integration.

UnitedHealth's Optum Rx sues California over PBM law

By Allison Bell – Optum Rx and Emisar Pharma Services — two businesses that help UnitedHealth Group manage prescription drug plans — are fighting California's new PBM law in court. California is trying to apply its new law to PBM efforts to serve self-insured employer health plans, as well as to PBM efforts to serve health insurers and government-run plans, such as public employee health plans. Optum Rx and Emisar say the California approach violates the Employee Retirement Income Security Act provision that preempts state efforts to regulate large benefit plans. The California law was created by state Senate Bill 41. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Legal Challenge Over ERISA Preemption: Optum Rx and Emisar Pharma Services argue that California’s new PBM law improperly extends state regulation to self-insured employer health plans, which are typically governed by federal ERISA rules. They claim that this state-level intervention disrupts the uniformity intended by ERISA and could create a patchwork of conflicting regulations for multi-state employers. The lawsuit seeks to clarify the boundaries between state and federal authority in managing employee benefit plans.

2. Potential Cost Implications for Employers: Industry groups, including the Pharmaceutical Care Management Association, warn that enforcing California’s PBM law could significantly increase costs for employer-sponsored health plans. The concern is that employers may face higher administrative burdens and expenses if required to comply with varying state-specific rules. This could result in increased costs per participant and complicate benefit management for companies operating in multiple states.

3. Broader National Impact and Ongoing Litigation: The outcome of this lawsuit could set a precedent for how other states approach PBM regulation in relation to ERISA plans. Similar legal disputes are ongoing in states like Arkansas, Iowa, and Tennessee, highlighting a nationwide debate over the extent of state authority in regulating pharmacy benefit managers. The case underscores the tension between state efforts to control drug costs and the federal goal of maintaining consistent benefit plan administration.

Drug Channels News Roundup, Mid-May 2026: Flawed Launch Price Math, Rising Pharmacy Closures, Hospital Pay Realities, 340B Hospitals vs. Grantees, and a Luxury Take on Specialty Pharmacy

By Bryce Platt, PharmD – The onslaught of pharmacy-related news doesn’t end. It may even be increasing in volume due to AI. But don’t worry—I’ve gathered some high-impact information over the last month from my LinkedIn posts that you can quickly read between your sets at the gym. I recommend reading BETWEEN your sets, but some may be brave enough to read during the set itself. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Drug Launch Price Averages May Misrepresent Market Trends: The article argues that unweighted average launch prices provide limited insight into overall drug spending because they do not account for utilization or product mix. It compares the issue to averaging the prices of vastly different consumer goods, suggesting that more approvals of ultra-rare disease drugs can raise averages even if comparable drug pricing remains stable. The broader takeaway is that utilization patterns, net prices, and the types of drugs entering the market may offer a more meaningful view of pharmaceutical cost trends than a single average figure.

2. Pharmacy Closures Raise Different Access Concerns Across Markets: The article notes that while chain pharmacies accounted for most pharmacy closures in 2025, many of those closures occurred in areas where alternative pharmacies remained available. Independent pharmacy closures, by contrast, may have a greater effect on patient access because they are often located in communities with fewer healthcare options. The piece emphasizes that evaluating pharmacy access requires looking beyond closure totals to understand the availability of care in affected regions.

3. Hospital Reimbursement and 340B Debates Reflect Broader Funding Questions: The article questions whether claims of insufficient reimbursement from Medicare and Medicaid fully account for the multiple funding streams available to hospitals, including tax exemptions, supplemental payments, and 340B-related revenue. It also highlights that hospitals and federal grantees participating in the 340B program operate under different incentives and may produce different outcomes despite being governed by the same statute. The discussion suggests that additional financial transparency and clearer distinctions between 340B entity types could improve policy debates surrounding hospital reimbursement and pharmaceutical pricing.

The Convenient Narrative Letting Insurers Off the Hook

By Wendell Potter – Zack Cooper argued this week in The New York Times that Americans may be blaming the wrong culprit for rising premiums. In his view, the bigger driver is hospital market power—fueled by years of consolidation that policymakers have done little to stop. On that point, he’s on solid ground saying that hospital prices have climbed steadily, and oversight has lagged. Where the argument falls short is in how it portrays insurers. It suggests they are largely on the defensive—unable to push back on powerful hospital systems and left to rely on tools like prior authorization and claim denials as a workaround. In that telling, insurers come across less as drivers of the problem and more as constrained players navigating a difficult market. Read Full Article...

HVBA Article Summary

1. Insurance and Hospital Consolidation Created a Cost “Arms Race”: The article argues that rising healthcare costs are the result of both insurer and hospital consolidation, rather than hospital market power alone. According to the author, large insurers consolidated first, prompting hospitals to merge in order to gain negotiating leverage against dominant payers. This cycle of consolidation contributed to higher prices, higher premiums, and increased financial pressure on patients and employers.

2. Insurers Often Shift Costs Instead of Controlling Them: The author contends that insurers may have limited incentives to aggressively reduce hospital prices because higher claims costs can also increase insurer revenue in certain employer-sponsored arrangements. When insurers cannot negotiate lower prices with dominant hospital systems, they instead rely on tools such as prior authorization, utilization management, and higher deductibles to manage spending. The article argues that these practices frequently shift costs and administrative burdens onto patients while making access to care more difficult.

3. Healthcare Complexity Benefits Both Insurers and Hospital Systems: The article describes insurers and hospital systems as operating within a mutually dependent system that relies on complexity and limited transparency. The author argues that opaque pricing structures, administrative barriers, and complicated billing practices make it difficult for patients, employers, and policymakers to evaluate healthcare costs or accountability. He concludes that meaningful reform would require addressing hospital pricing power, insurer incentives, and administrative complexity together rather than focusing blame on only one part of the system.

How AI is changing the face of benefits advising

By Bruce Shutan – From boardrooms to water coolers, there's no escaping the topic of artificial intelligence — and the employee benefits space is no exception. Breathtaking advances in this technology are streamlining labor-intensive and research-heavy tasks for HR and benefit professionals, enhancing efficiency and supporting more informed, strategic decision-making. AI also is reshaping the way brokers and consultants dispense expertise and leverage their institutional knowledge through aggregated insights and benchmarks. Case in point: WTW's AI-enabled assistant, Expert, which draws on its human capital consulting, as well as research, trend data, white papers, regulatory briefings, best practices and case studies. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. AI Streamlines and Enhances Benefits Advising: Artificial intelligence is increasingly automating routine and research-heavy tasks for HR and benefits professionals. This allows advisers to focus on higher-value activities, such as strategic planning and organizational design, rather than administrative work. The integration of AI tools is leading to more efficient operations and improved decision-making within benefits advisory.

2. Personalized and Proactive Support for Employees: AI-driven platforms like Businessolver's Sofia provide real-time, anticipatory support to employees, identifying potential issues before they escalate. These systems use pattern recognition and analytics to guide employees toward relevant benefits and preventive care, enhancing overall well-being. By proactively addressing employee needs, organizations can reduce stress and improve satisfaction with their benefits offerings.

3. AI Empowers Data-Driven Recommendations for Brokers: Advanced AI solutions aggregate insights from large datasets, enabling brokers and consultants to identify trends and gaps in benefits utilization. This data-driven approach helps advisers tailor their recommendations to client needs and respond more effectively to emerging patterns. As a result, brokers gain a clearer understanding of where to focus education and strategy adjustments for optimal client outcomes.

Employers say they prefer rebate-free PBM models

By Emily Olsen – Employers are looking for a simpler pharmacy benefits model, particularly an approach that eliminates rebates to send savings directly to patients, according to a survey released last week. More than 90% of employers surveyed agreed a rebate-free model would improve transparency into prescription drug prices, according to the research by communications and reputation management firm Penta Group for Evernorth Health Services, which operates the Express Scripts pharmacy benefit manager. Additionally, 91% said an approach that removed rebates is easier to understand, and 90% reported it would improve employee satisfaction and drug affordability. Read Full Article...

HVBA Article Summary

1. Employer Preferences for Simpler Models: The survey of 300 employers with at least 1,000 workers found strong support for pharmacy benefit models that eliminate rebates. Employers believe that removing rebates would make pharmacy benefits easier to understand and manage, aligning more closely with their organizational needs. This preference reflects a desire for greater predictability and transparency in pharmacy spending.

2. Regulatory and Political Pressure on PBMs: Pharmacy benefit managers (PBMs) have come under increased scrutiny from lawmakers and regulators due to concerns about opaque business practices and their impact on drug costs. Recent legislative and regulatory actions, including a funding bill signed by President Trump and lawsuits from the Federal Trade Commission, have targeted PBM practices such as linking compensation to drug list prices and steering patients toward higher-cost medications. These pressures are prompting PBMs to reconsider and reform their business models.

3. Industry Shifts Toward Transparency: Major PBMs, including Express Scripts and Optum Rx, are beginning to transition to models that reduce or eliminate the use of rebates. Express Scripts has settled with the FTC and committed to not preferring high list price drugs on its formularies, while Optum Rx has announced a move to a fee-based model that is not tied to drug prices or prescription volume. These changes indicate a broader industry trend toward transparency and direct cost savings for employers and patients.

How AI can enhance benefit leader, broker relationships

By Lee Hafner – For benefit brokers, well-trained artificial intelligence can assist in meeting the growing needs of their employer clients, especially in the healthcare space. As this area in particular becomes increasingly complex, benefit leaders are looking for broker partners who are present and proactive, according to Will Johnson, co-founder and CEO of Gyde, which is where he said expert-programmed AI assistance like his AI-native brokerage platform can help. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. AI Expands Broker Capabilities: Artificial intelligence is enabling benefit brokers to move beyond traditional administrative roles and become more proactive partners for their clients. By automating routine tasks and providing timely insights, AI allows brokers to focus on higher-value activities such as strategic planning and client engagement. This shift can enhance the overall value brokers provide to both employers and employees.

2. Personalization and Efficiency in Renewals: AI-driven platforms like GydeOS and Gia are helping brokers tailor benefit recommendations based on the evolving needs of each client's workforce. These tools can streamline the renewal process by quickly analyzing options and suggesting relevant products, reducing the time brokers spend on manual research. As a result, brokers can have more meaningful and efficient conversations with clients, improving satisfaction and outcomes.

3. Balancing Technology with Human Touch: While AI offers significant advantages in managing complexity and increasing productivity, its effectiveness depends on being paired with human expertise and empathy. The article emphasizes the importance of brokers understanding and adapting to new technologies while maintaining strong personal relationships with clients. This balance ensures that technological advancements empower, rather than replace, the essential human connection in benefits management.

When a Patient Portal Alone Won't Suffice

By Fred Pelzman – Over the weekend, when my wife and I were heading home from a late afternoon movie followed by a stop to pick up some ice cream, we remembered that we needed to stop by the pharmacy. Since we moved into the neighborhood 30 years ago, our local non-chain pharmacy has been open until 8:00 p.m. every night, which is often a real convenience. Unfortunately, however, when we arrived a few minutes after 7:00, the pharmacy employees had shut everything down and were locking the doors. The pharmacist informed us that management had decided to close 1 hour early every night, mostly to save money. Read Full Article...

HVBA Article Summary

1. Limitations of Patient Portals: While patient portals offer a convenient way for patients to communicate with their healthcare providers, they are not always sufficient for managing complex or urgent medical needs. The author notes that some patients expect to resolve intricate health issues through simple messaging, which can lead to unsafe or incomplete care. This reliance on portals can also increase the burden on physicians, who may be asked to make clinical decisions without adequate information.

2. Need for Expanded Access Points: The current healthcare system faces challenges with access, as primary care doctors are overwhelmed and subspecialists have long wait times. Relying solely on traditional in-person visits, urgent care, or emergency departments is not sustainable, and can result in unnecessary testing and overtreatment. The article suggests that new, creative solutions are needed to provide timely care without further straining healthcare providers.

3. Potential Role of Technology and Team-Based Care: The author envisions a future where technology, such as generative AI and virtual care platforms, could help triage patient concerns and handle routine issues, freeing up clinicians for more complex cases. Additionally, expanding the roles of pharmacists and other healthcare team members could improve efficiency and patient education. However, the author cautions that technology should augment, not replace, human care, and that thoughtful integration is essential to ensure patient safety and satisfaction.