$3 Billion Wake-Up Call: How Litigation Is Holding Insurers Accountable

By Wendell Potter - I wrote a few weeks ago that a massive class action lawsuit, brought by doctors and other health care providers against the country’s Blue Cross and Blue Shield plans, will likely be settled in the coming months. If approved as expected by a federal judge in Alabama, the settlement, valued at more than $3 billion, will be the biggest in U.S. health care history. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Significance of the Settlement: The Blue Cross and Blue Shield settlement marks a milestone in addressing systemic issues within the health insurance industry, compelling insurers to pay $2.8 billion to resolve allegations of exploiting healthcare providers for profit. This settlement, coupled with an additional $500 million investment in business practice reforms, demonstrates the critical role litigation plays in holding insurers accountable and driving meaningful change for physicians, hospitals, and patients.

2. Litigation as a Catalyst for Reform: Legal actions like these underscore the power of litigation in pressuring insurers to prioritize fair practices, timely payments, and patient interests. While public policy and market-driven reforms are often slow and unpredictable, class-action lawsuits have proven to be an effective tool for reforming unethical and unlawful industry practices, as illustrated by past settlements involving major insurers such as Cigna and Aetna.

3. Historical Context and Broader Implications: The BCBS settlement echoes previous class-action cases, such as the 2004 Cigna settlement, which resulted in $140 million paid to physicians and a $400 million overhaul of billing systems. These cases highlight recurring unethical practices by insurers driven by Wall Street pressures and weak regulatory oversight. The BCBS case, significantly larger in scale, may set a precedent for increased scrutiny and accountability across the health insurance industry.

Watchdog finds gaps in HHS health data privacy audits

By Naomi Diaz - The U.S. Department of Health and Human Services is meeting the minimum requirements for auditing health organizations' data privacy practices, but a recent report shows there's more work to be done to protect patient data. Read Full Article…

HVBA Article Summary

1. Growing Cybersecurity Threats in Healthcare: Cyberattacks targeting healthcare providers and vendors have risen sharply, frequently exposing sensitive patient information. HIPAA mandates robust data protection measures and timely breach notifications, but enforcement and compliance gaps persist.

2. Inadequacies in OCR's HIPAA Audits: A review of OCR's audits from 2016 to 2020 revealed significant shortcomings, including limited scope—only 8 of 180 HIPAA standards were assessed in early investigations—and the absence of any audits since 2017. Additionally, there is no systematic process for addressing audit findings or escalating them for compliance reviews.

3. Recommendations and Resource Challenges: The HHS Office of Inspector General advised OCR to expand audit coverage, establish follow-up protocols, and implement metrics to evaluate audit effectiveness. While OCR agreed with most recommendations, it highlighted limited funding and Congress' inaction on budgetary support as significant barriers to improving the program.

Biden proposes Medicare, Medicaid cover anti-obesity drugs

By Noah Tong - The Centers for Medicare & Medicaid Services is attempting to cover anti-obesity medications under Medicare Part D and Medicaid, the agency announced Nov. 26. Under the Contract Year 2026 MA and Part D proposed rule (PDF), CMS is choosing to follow conventional medical thinking that obesity is a disease. Read Full Article… 

HVBA Article Summary

1. Reinterpretation of Anti-Obesity Drug Coverage: CMS is revisiting the statute that excludes weight loss drugs from Medicare coverage, citing alignment with policies that cover treatments for conditions like AIDS wasting and cachexia. This reinterpretation would make approximately 3.4 million Americans eligible for coverage of anti-obesity medications under Medicare Part D, potentially increasing costs by $24.8 billion in Part D and $14.8 billion in Medicaid, while offering long-term savings and addressing health equity concerns.

2. Prior Authorization and AI Safeguards: The proposed rule introduces significant changes to prior authorization processes in Medicare Advantage (MA), including prohibitions on reopening approved inpatient authorizations and mandating the creation of utilization management committees. Additionally, CMS establishes safeguards to ensure AI-driven decision-making in MA plans does not result in discriminatory practices, aligning with broader federal initiatives to regulate AI in healthcare.

3. Behavioral Health and Broker Reforms: CMS proposes measures to enhance behavioral health access by capping cost sharing for mental health and substance abuse services, including zero cost sharing for opioid treatment programs. Broker oversight is tightened with expanded definitions of marketing tactics, stricter ad review processes, and new requirements to discuss eligibility for subsidies and Medigap. The rule also seeks to promote transparency in medical loss ratio reporting and reinforces access to generics and biosimilars in Part D formularies.

What's on the minds of American workers

By Jackie Stewart - Almost 30% of U.S. workers reported feeling a lack of interest, motivation or energy within the 30 days prior to taking the 2024 Work in America Survey: Psychological Safety in the Changing Workplace. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Employee Stress and Workplace Challenges: The APA research revealed significant workplace stressors, including emotional exhaustion, lack of motivation, and interpersonal conflicts as employees transition back to in-person work environments. Economic anxiety, job insecurity, and concerns about artificial intelligence replacing job duties add to these stressors, highlighting a nuanced landscape of employee dissatisfaction despite overall job satisfaction levels.

2. Impact of Work Preferences and Management Relationships: A third of workers reported dissatisfaction with their current work location setup (in-office, remote, or hybrid), contributing to feelings of disconnection. Positive relationships with managers play a critical role in reducing negative feelings, as employees with supportive supervisors reported fewer instances of burnout and emotional exhaustion.

3. Proposed Solutions for Employee Well-being: Employers can address these challenges through clear communication about workplace changes and AI usage, improved conflict resolution training for supervisors, and enhanced promotion of Employee Assistance Programs (EAPs). Ensuring easy access to resources like counseling, financial planning, and legal advice while fostering a stigma-free culture around mental health can significantly improve morale and well-being.

Federal Court Orders Health Plan to Distribute $12M in Assets to Participants, Providers

By Remy Samuels - The U.S. District Court for the Northern District of Illinois is requiring a health plan, run by Receivership Management Inc. in Madison, Tennessee, to distribute $12 million in assets to health plan participants and medical providers. Read Full Article…

HVBA Article Summary

1. Investigation and Legal Actions: The Department of Labor (DOL) found that former fiduciaries of the AEU Holdings LLC Employee Benefit Plan mismanaged funds, leading to approximately $83 million in health claims being wrongly billed to participants across 36 states. The funds were improperly transferred to offshore accounts, prompting the DOL to sue the fiduciaries and obtain a restraining order in 2017, barring them from serving as fiduciaries for ERISA-covered plans.

2. Recovery and Distribution Efforts: Since 2021, Receivership Management has worked to recover funds through litigation, securing more than $17 million to address unpaid claims. In March 2023, a court-approved plan distributed $6.3 million in interim payments, with a final distribution plan approved in October 2023. The final plan includes $9.4 million for medical providers and $2.7 million for plan participants whose providers refused interim payments.

3. Broader Implications and Regulatory Oversight: The case highlights the significant harm caused by fiduciary breaches under the Employee Retirement Income Security Act (ERISA). Enhanced scrutiny and regulatory measures, including those under the Consolidated Appropriations Act of 2021, aim to hold fiduciaries accountable and ensure fair pricing and proper management of health plans. Companies like Wells Fargo and Johnson & Johnson have faced recent lawsuits for alleged health plan mismanagement.

Offering health insurance is becoming less lucrative

By Rebecca Pifer - Despite growing revenues, most major insurers saw their profits from offering health plans shrink in the third quarter as pressures in government programs stretched into the back half of the year. Read Full Article… 

HVBA Article Summary

1. Elevated Costs and Utilization Impact Profitability: Insurers faced heightened pressure in the third quarter due to unexpected healthcare utilization in Medicare Advantage (MA) and rate-acuity mismatches in Medicaid. Aetna experienced the steepest decline in operating profit among major payers, as medical loss ratios (MLRs) rose significantly year over year, signaling higher spending on medical claims.

2. Diverging Medicaid Trends Among Insurers: Medicaid insurers reported varying impacts from the ongoing eligibility redetermination process. Elevance cited dramatic cost trend increases up to 20%, while Molina noted a smaller but still elevated trend. Analysts attribute these discrepancies to differences in state rate updates and internal metrics, though all insurers agree on the sustained cost pressures.

3. Shifting Medicare Advantage Strategies and Political Outlook: Insurers are restructuring Medicare Advantage plans to improve profitability, including reducing benefits and altering plan geographies. The industry anticipates regulatory relief under a Trump administration, expected to be friendlier to MA, providing potential optimism amidst operational challenges.

Telehealth Advocates Praise DEA’s 3rd Extension of Telemedicine Flexibilities, but Call for Further Action

By Marissa Plescia - Several telehealth advocates are coming out in support of the Drug Enforcement Administration’s (DEA) third extension of Covid-19 telehealth flexibilities for the prescribing of controlled substances. However, they argue that more work needs to be done to make these flexibilities permanent. Read Full Article…

HVBA Article Summary

1. Extension of Telehealth Flexibilities: The DEA extended telehealth flexibilities for prescribing controlled substances without in-person visits until the end of 2025. Advocates, like Kyle Zebley of the American Telemedicine Association, praised the move as essential for maintaining access to care for underserved patients and avoiding disruptions while a permanent framework is developed.

2. Call for Permanent Solutions: Telehealth leaders, including Stephanie Strong of Boulder Care, urge the government to adopt long-term policies like the TREATS Act to make telehealth flexibilities permanent, especially for opioid use disorder. Many criticize delays in implementing a special registration process for virtual prescribing, despite a 2008 congressional mandate.

3. Balancing Access and Oversight: Experts stress the need for regulations that ensure access while preventing misuse. Eric Triana of Talkiatry highlights telemedicine's role in addressing mental health provider shortages and calls for safeguards that detect abuse without hindering patient access to vital services.