Hospitals allege contracted CVS Health subsidiaries pocketed their 340B savings

By Dave Muoio – Several academic and nonprofit health systems have filed lawsuits against CVS Health, accusing the company and its subsidiaries of improperly pocketing about $250 million of 340B Drug Pricing Program savings from 2020 to 2025. The providers’ legal complaints were filed earlier this week in New York, Kansas and Michigan federal courts. Among the plaintiffs are member hospitals of Mount Sinai, the University of Kansas Health System and the University of Michigan Health. “CVS Health’s mission statement commits the company to lowering the cost of care and improving the health and well-being of those it serves,” Jonathan Levitt, founding partner at Frier Levitt, which is representing the plaintiffs in all three filed suits. Read Full Article...

HVBA Article Summary

1. Allegations of Diverted 340B Savings: The lawsuits claim that CVS Health and its subsidiaries conspired to retain a significant portion of the 340B Drug Pricing Program savings intended for safety-net hospitals. The hospitals allege that CVS subsidiaries used their roles as pharmacy benefit managers, contract pharmacies, and third-party administrators to lower remittance rates and keep the difference as profit. This alleged scheme is said to have diverted funds that Congress designated to support care for vulnerable populations.

2. Complex Vertical Integration at Issue: According to the complaints, the alleged diversion of funds was made possible by the vertical integration of CVS Health’s subsidiaries. The process reportedly involved discreetly flagging eligible claims, negotiating lower internal reimbursement rates, and masking the true transaction amounts from the hospitals. The lawsuits argue that this structure allowed CVS to artificially depress rates and obscure the actual flow of funds from the 340B program.

3. Hospitals Seek Accountability and Transparency: The plaintiff hospitals estimate that about 56% of their total 340B savings from 2020 to 2025 were withheld, based on internal investigations of claims and remittance data. They assert that CVS Health has resisted requests for transparent audits, despite contractual provisions allowing such reviews. The hospitals are asking the courts to require a full accounting of the allegedly retained funds and to order their return to support care for underserved communities.

PBM pharmacy ownership ban passes in Tennessee

By Allison Bell – Members of the Tennessee House voted 86-7 Tuesday for final state General Assembly passage of a bill that could prohibit pharmacy benefit managers from owning or controlling pharmacies. The bill now heads to the desk of Tennessee Gov. Bill Lee, who is a Republican. Drafters of the Freedom, Access and Integrity in Registered Pharmacy Act bill, or FAIR Rx Act bill, have included a section stating that the bill simply regulates ownership of Tennessee pharmacies, not insurance coverage or employer health plans governed by the Employee Retirement Income Security Act. But a three-judge panel at the 6th U.S. Circuit Court of Appeals ruled last week that ERISA does preempt a Tennessee PBM law enacted in 2021 and another Tennessee PBM law enacted in 2022. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Tennessee Legislature Passes PBM Ownership Ban: The Tennessee General Assembly has approved the FAIR Rx Act, which aims to prevent pharmacy benefit managers (PBMs) from owning or controlling pharmacies in the state. The bill is now awaiting the governor's signature and, if enacted, would represent a significant change in how PBMs operate within Tennessee. The legislation specifically claims to regulate pharmacy ownership rather than insurance or employer health plans governed by ERISA.

2. Legal Challenges and ERISA Preemption: Recent federal court rulings, including a decision by the 6th U.S. Circuit Court of Appeals, have found that ERISA preempts state laws attempting to regulate PBMs serving employer health plans. This legal precedent suggests that even if Tennessee enacts the FAIR Rx Act, it could face immediate legal challenges regarding its applicability to PBMs working with ERISA-governed plans. The ongoing tension between state regulatory efforts and federal preemption is likely to result in further litigation.

3. Stakeholder Reactions and Broader Implications: Major PBMs and their parent companies, such as CVS Health, have strongly opposed the legislation, warning of potential pharmacy closures and lawsuits if the bill becomes law. Proponents argue that the bill will benefit independent pharmacies and increase transparency, while critics claim it may not lower drug costs or improve patient access. The outcome of this legislative and legal battle could influence similar efforts in other states and shape the future relationship between PBMs, pharmacies, and employer-sponsored health plans.

Liberty Mutual hit with lawsuit over Everest ransomware data leak

By John Hilton – A new lawsuit accuses Liberty Mutual Insurance Co. of failing to protect sensitive personal and medical information allegedly stolen in a ransomware attack tied to the cybercriminal group Everest. The hackers reportedly stole a massive trove of sensitive data and have begun leaking documents online after a brief ransom negotiation window expired, according to various reports. The lawsuit, filed on behalf of current and former customers as a proposed class action, alleges that Liberty Mutual and/or one of its third-party vendors is responsible for the April 30 data breach. Read Full Article...

HVBA Article Summary

1. Allegations of Inadequate Data Protection: The lawsuit claims that Liberty Mutual failed to implement sufficient cybersecurity measures to prevent unauthorized access to customer data. Plaintiffs argue that the company did not adequately encrypt or safeguard sensitive information, which allegedly led to the exposure of Social Security numbers, financial records, and medical data. The complaint also states that Liberty Mutual did not fulfill promises made in its privacy policies regarding data protection.

2. Impact on Affected Individuals: The plaintiffs, representing a proposed nationwide class, report experiencing significant consequences following the breach, such as increased spam, scam, and phishing attempts. One plaintiff described ongoing efforts to monitor financial accounts and credit files, as well as emotional distress including anxiety and sleep disruption. The lawsuit contends that these harms go beyond mere inconvenience and constitute real and ongoing risks for those affected.

3. Ongoing Risks and Legal Action: According to the lawsuit, the Everest ransomware group has already begun leaking stolen documents online after ransom negotiations failed. Plaintiffs assert that the exposure of sensitive information on the dark web increases the risk of identity theft and fraud for affected customers. The legal action seeks damages and injunctive relief to address both the immediate and long-term consequences of the data breach.

3 big shifts for the GLP-1 market

By Paige Twenter – In 2026, the U.S. prescription drug market is predicted to exceed $1 trillion for the first time, and GLP-1 drugs such as Ozempic, Zepbound and Wegovy are the primary drivers of this growth. GLP-1s accounted for 14% of U.S. drug spending last year, with these drugs costing $131.9 billion of the $915.2 billion spent on all prescriptions in 2025. In 2023, Goldman Sachs researchers projected the global obesity market alone could hit $100 billion by 2030. A more recent analysis from Statista forecast three GLP-1 medications for obesity, including one awaiting FDA approval, will alone earn $58.8 billion in 2030. Read Full Article...

HVBA Article Summary

1. Oral GLP-1 Approvals Expand Access: The FDA has recently approved the first oral GLP-1 medications for weight loss, including Novo Nordisk’s Wegovy pill and Eli Lilly’s Foundayo. These approvals mark a significant shift from previously available injectable-only options, potentially broadening the patient population able to access these therapies. Early adoption rates for these oral drugs suggest strong demand, and their convenience may further drive market growth.

2. Medicare Coverage and Policy Uncertainty: Medicare will begin covering weight loss GLP-1 drugs in July under a new pricing agreement, making these medications more affordable for eligible beneficiaries. However, the long-term future of Medicare coverage for GLP-1s remains uncertain, as a proposed permanent program was paused due to insufficient participation from plan sponsors. Adherence challenges among older adults, including high discontinuation rates due to cost and side effects, may also impact the effectiveness and sustainability of expanded coverage.

3. Tighter Regulation of Compounded GLP-1s: The FDA is cracking down on compounded versions of GLP-1 drugs, requiring pharmacies and outsourcing facilities to halt production and distribution of compounded semaglutide and related medications. This enforcement follows a period of shortages that had allowed compounding pharmacies to fill gaps in supply. As regulatory scrutiny increases and legal actions escalate, patients who relied on compounded drugs for affordability may face new barriers, raising questions about whether branded oral options can sufficiently address access and cost concerns.

What advisors think about pooled employer plans, alternative investments

By Susan Rupe – Pooled employer plans represent an opportunity in the defined contribution plan space, although few DC plan advisors are familiar with them. LIMRA’s research found that only about one-third of DC plan advisors are familiar with PEPs, although the advisors who are familiar with them fall into one of three groups. The first group was described as “occasional” advisors, said Deb Dupont, assistant vice president and head of institutional retirement research at LIMRA Workplace Benefits. About 17% of occasional advisors are familiar with PEPs, according to LIMRA research. Read Full Article...

HVBA Article Summary

1. Limited Familiarity with Pooled Employer Plans: LIMRA's research highlights that only about one-third of defined contribution (DC) plan advisors are familiar with pooled employer plans (PEPs). The level of familiarity varies significantly among advisor types, with specialists being much more knowledgeable than occasional or hybrid advisors. This suggests that broader education and outreach may be needed to increase awareness and understanding of PEPs among advisors, especially those serving small businesses.

2. Advisors Seek Education and Support on PEPs: Many advisors express a strong interest in learning more about PEPs and welcome additional tools, training, and support to better serve their clients. They primarily look to pooled plan providers for this education but also value resources from their home offices, broker-dealers, and record keepers. This indicates an opportunity for industry stakeholders to provide targeted educational initiatives to help advisors navigate the evolving PEP landscape.

3. Mixed Views on Alternative Investments in DC Plans: While a recent executive order opened the door for alternative investments in employer-sponsored DC plans, most advisors remain skeptical about their integration. Only a minority believe private equity and private credit should be included in DC investment vehicles, and there is no clear consensus on how these alternatives should fit into plan strategies. Despite this skepticism, very few advisors think alternative investments have no place at all in DC plans, reflecting ongoing debate and uncertainty in the industry.

Will Mark Cuban’s Cost Plus Wellness Appeal to Employers? - MedCity News

By Marissa Plescia – After disrupting the prescription drug market with Cost Plus Drugs — which now has the White House seal of approval — Mark Cuban has quietly turned to the employer market. Since January, Cost Plus Wellness has been on a mission to bring transparency to the world of employee benefits. The initiative connects self-funded employers directly with providers, including ambulatory surgical centers, single-specialty groups and multi-specialty groups. Real contracts with these providers are published on the website, showing terms, rates and pricing upfront. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Direct Contracting and Transparency Focus: Cost Plus Wellness aims to simplify and make transparent the process by which self-funded employers contract with healthcare providers. By publishing real contracts and pricing openly, the initiative seeks to reduce administrative complexity and eliminate hidden fees often found in traditional insurance arrangements. This model is designed to empower employers to negotiate directly and potentially lower their healthcare costs.

2. Scalability and Quality Concerns: While the platform has generated interest as a conversation starter, experts question whether it can scale beyond its current Texas focus and address broader employer needs. Key stakeholders emphasize that for widespread adoption, the model must expand geographically and incorporate robust provider quality and outcome data. Transparent pricing alone is not sufficient for most employers, who also prioritize care quality and access.

3. Industry Context and Competitive Landscape: Cost Plus Wellness is part of a broader movement toward direct contracting in healthcare, with other companies like Aligned Marketplace and Nomi Health pursuing similar models. These initiatives reflect growing employer frustration with traditional intermediaries and a desire for more control over healthcare spending. However, the success of such models will depend on their ability to balance transparency, quality, and scalability in a complex healthcare ecosystem.

Why going the extra mile with healthcare benefits pays off in retention

By Adam Russo – To the casual observer, recruiting, hiring, and onboarding job candidates may seem like simple processes. You browse LinkedIn and Indeed, conduct a couple interviews, send out an offer letter, get the new employee's workstation up and running, have them sign some paperwork, and then run through some online training. If only it were so easy — and inexpensive. An inconvenient truth of the HR world is that it is an incredible investment of not only time but also money to find, onboard and train a new employee — thus magnifying the need to ensure said employee is a long-term hire. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Comprehensive Health Benefits Enhance Retention: Offering robust and affordable health benefits can significantly improve employee retention rates. The article highlights that investing in such benefits may ultimately cost less than the repeated expenses of recruiting, onboarding, and training new hires. Employees are more likely to stay with a company that provides meaningful healthcare support, reducing turnover and associated costs.

2. Zero-Deductible Plans Can Be Cost-Effective: The Phia Group’s experience demonstrates that zero-deductible health plans, when managed prudently, can be both attractive to employees and financially sustainable for employers. By minimizing out-of-pocket costs for staff, the company fosters loyalty and engagement while still maintaining control over healthcare spending. This approach challenges the assumption that higher employee cost-sharing is necessary to manage employer healthcare budgets.

3. Incentive Programs Drive Engagement and Savings: Implementing creative incentive programs, such as rewards for utilizing high-quality, cost-effective healthcare providers, encourages employees to make informed choices about their care. These programs not only benefit employees directly but also help employers control costs and improve overall company welfare. Educating employees about healthcare spending and offering transparent, innovative benefits can create a culture of shared responsibility and long-term retention.