Elevance Health is denying care for Medicaid patients at high rates, according to Department of Health and Human Services report

By Wendel Potter - As I wrote a few days ago, Elevance, the big for-profit health insurer previously known as Anthem, reported making $5.5 billion in profits in just the first six months of this year, a 14.4% jump from the $4.8 billion in profits it made during the same period of 2022. Read Full Article… 

VBA Article Summary

1. Significant Role and Profits from Medicaid and Medicare Advantage Plans: Elevance's profits have grown substantially due to its expanding enrollment in Medicare Advantage and Medicaid plans. More than one in seven Medicaid beneficiaries in the U.S. is enrolled with Elevance. By receiving a set amount per beneficiary and denying certain claims, Elevance is able to maximize profits for itself and its investors. Its unique position and method of operation allow it to benefit from the current healthcare system, but questions arise about the ethics and fairness of its approach.

2. High Denial Rates and Issues with Coverage: Elevance's practices have caught the attention of federal investigators, particularly because of its high denial rates for medical care and treatments that doctors deem necessary. The Department of Health and Human Services Office of Inspector General (OIG) found that Elevance had one of the highest denial rates among 115 Medicaid MCOs, denying more than one out of three requests (34%) for coverage in its Medicaid health plans. This issue extends beyond Medicaid, affecting the Medicare Advantage program as well, leading to calls for reform and scrutiny.

3. Concerns about Business Practices and Call for Action: The OIG report and other investigations have raised serious concerns about Elevance's business model and the payment structure that encourages denial of medical care to maximize profits. These concerns are exacerbated by the lack of oversight by most state Medicaid agencies, which often don't review or monitor denial data. Incidents such as Elevance's contract dispute with Bon Secours Mercy Health, which has led to difficulties for Medicaid patients, exemplify the real-world impact of these practices. The article concludes with a call to action for state officials and federal agencies to increase scrutiny and oversight to ensure that private insurers like Elevance are operating in the best interests of patients and taxpayers.

CVS to lay off 5K employees amid cost pressures

By Rebecca Pifer - The layoffs, first reported by the Wall Street Journal and confirmed to Healthcare Dive, represent under 2% of CVS’ workforce. CVS employed more than 300,000 workers as of the end of last year, roughly three-fourths of them full-time, according to a filing with the SEC. Read Full Article… 

VBA Article Summary

1. Job Reduction and Expense Measures: CVS is cutting 5,000 mostly corporate positions as part of ongoing efforts to reduce expenses. The company is facing cost pressures due to recent multi-billion-dollar acquisitions and is also minimizing the use of consultants, vendors, and certain business initiatives that don't align with its strategy. Customer-facing roles, such as those in stores or clinics, will not be affected by the layoffs.

2. Recent Acquisitions and Business Focus: With recent acquisitions including Oak Street Health for $10.6 billion and Signify for $8 billion, CVS is concentrating more on direct healthcare delivery. Despite reporting rising revenue, the company is encountering significant integration costs and has lowered its 2023 earnings outlook. In addition, CVS has decided to close its clinical trials business and is continuing to scale back its retail drugstore presence.

3. Challenges and Strategic Direction: CVS is navigating various challenges this year, such as drugmakers restricting sales of discount drugs and diminishing COVID-19 contributions. The layoffs are part of a broader effort to reprioritize investments in care delivery and technology and to adapt to changing consumer health needs and expectations. Affected employees will receive severance pay and assistance with finding new roles, reflecting a longer-term vision for the company's success.

Vesttoo fallout likely to have lasting effect on market

By Judy Greenwald, and Matthew Lerner - Fronting insurers and others will likely tighten their controls in the wake of alleged fraud that surfaced last month involving Vesttoo Ltd., but some in the industry were surprised sufficient measures weren’t already in place. Read Full Article… 

VBA Article Summary

1. Allegations of Fraudulent Letters of Credit: Vesttoo, the online reinsurance intermediary, is facing allegations that fraudulent letters of credit (LOCs) were used in its transactions. Companies like Clear Blue Insurance Group and China Construction Bank have been implicated, and investigations are underway. Some LOCs provided through a Chinese bank for Vesttoo's transactions were allegedly fraudulent. Several companies are scrambling to restructure their Vesttoo-related deals, while others are preparing for litigation.

2. Potential Impacts on the Industry: Industry experts suggest that the fallout could be significant, especially if widespread fraud is discovered. Some of the consequences already observed include an increase in due diligence in fronting situations, credit rating agencies reviewing ratings, and various companies disclosing their connections and legal stances regarding Vesttoo. The total size of Vesttoo's platform could be between $5 billion and $10 billion. Observers like the Vermont Department of Financial Regulation and Fitch Ratings have pointed to the need for oversight and caution in ceded reinsurance activities.

3. Reactions and Responses from Various Stakeholders: Various companies, including Aon PLC, Clear Blue Insurance Group, and Beazley PLC, have made statements or taken actions in response to the situation. Aon PLC disclosed that clients are suing over transactions involving Vesttoo. Regulators, insurers, and legal experts are closely watching the unfolding situation, and some are already seeing challenges focused on the fronting marketplace. The article also emphasizes the importance of quality control in the fronting marketplace and the need for a renewed focus on well-capitalized companies and attention to credit risk.

Americans Show Lack of Knowledge, Uptake of Long-Term Care Insurance

By Remy Samuels - An unprecedented surge of retirement-age Americans is quickly approaching, as the number of people turning 65 every day will increase to more than 12,000 in 2024, according to the Alliance for Lifetime Income. Despite this anticipated growth in the country’s retirement-age population, very few are insured for the costs of long-term living, and most don’t understand the basics of long-term care insurance, according to new data from the Nationwide Retirement Institute. Read Full Article… 

VBA Article Summary

1. Discrepancy and Misunderstanding about Long-Term Care Insurance: Nationwide and LIMRA's survey revealed that while 18% of adults believe they have long-term care insurance, actual industry data shows only 3.1% own it. More than half of the respondents confused long-term care insurance with long-term disability insurance, and 29% confused it with health insurance. Misconceptions, especially among Millennials, might lead to the discovery of a lack of coverage when it's most needed.

2. Cost and Value Considerations: The cost of long-term care insurance is often cited as the primary reason for not purchasing it, with higher perceived costs among Baby Boomers and women. The average annual premium varies by age group, with Millennials at $1,500, Gen X at $2,000, and Boomers at $3,000. There's a desire for guaranteed premiums that will not increase and benefits that stay the same. Some Millennials are interested in transferring money from 401(k) plans to purchase coverage.

3. Information Sources and Communication Across Generations: Baby Boomers lean towards financial professionals for advice on long-term care insurance, while Millennials are influenced by social media and online sources. More than one in four adults have not discussed long-term care costs with anyone, but 30% would discuss it with a financial professional in the future. Nationwide encourages financial professionals and plan sponsors to foster discussions around long-term care costs in retirement, to help educate and dispel misconceptions.

Lawsuit Against Insurer Claims Retaliation Against Docs for Out-of-Network Referrals

By Randy Dotinga  - California's highest court has revived a high-profile lawsuit that could have a major impact on whether insurers can punish physicians who refer patients to out-of-network providers. Read Full Article… 

VBA Article Summary

1. Legal Conflict Between CMA and Aetna: The California Medical Association (CMA) is suing Aetna, one of the largest health insurers in the U.S., alleging that the insurer illegally retaliated against physicians who referred patients to out-of-network clinics. The case, dating back to 2012, has had multiple legal twists, including being killed in lower courts but later resurrected by the California Supreme Court. The ruling means that the case will continue in Los Angeles County's Superior Court, but the decision has no direct national effect.

2. The Issue of Out-of-Network Care and Surprise Billing: Out-of-network care accounts for only 4.7% of professional medical claims in 2020 but often leads to unexpected bills and denials. This issue of "surprise billing" has led to the passage of state and federal laws, including California's own no-surprise-billing law in 2017 and the federal No Surprises Act in 2020. However, tensions remain high between providers and insurers over out-of-network fees, with insurers feeling slighted when physicians refer patients outside their approved network.

3. Support and Opposition to the Case: The CMA has garnered support for its lawsuit from various legal and advocacy entities including the California attorney general, several major California cities, the AMA, and others. Conversely, Aetna's stance has found backing from groups like the US Chamber of Commerce and the California Association of Health Plans. The case brings to light larger discussions surrounding patient care, the role of insurance providers, and the financial motivations behind healthcare decisions, with implications that might influence the thinking of judges in other regions.

Global commercial insurance pricing up 3% in Q2: Marsh

By Matthew Lerner - Global commercial insurance pricing rose 3% in the second quarter, compared with 4% in the first quarter and 9% in the second quarter of 2022, according to a report Monday from Marsh. Read Full Article…

VBA Article Summary

1. Ongoing Trend of Price Increases: The second quarter of this year marked the 23rd consecutive quarter where composite pricing increased, the longest run since the inception of the broker's pricing index in 2012. The increases peaked at 22% in the fourth quarter of 2020, with the most significant recent rise in property insurance at 10%, followed by casualty insurance at 3%, and cyber insurance at 1%. Meanwhile, financial and professional lines saw a decline in pricing by 8%, following a 5% decline in the first quarter.

2. Regional Variations: Regionally, composite pricing exhibited different trends, with the U.S. experiencing a 4% increase in the second quarter. Latin America and the Caribbean saw the largest increase at 8%, followed by Europe at 5%, the Pacific at 2%, the U.K. at 1%, and Asia where the composite pricing remained flat. In the U.S., property insurance pricing was up 19%, casualty pricing up 3%, and financial and professional lines down 10% compared to the previous quarter.

3. Mixed Reactions and Future Concerns: While the moderation in cyber and D&O (Directors and Officers) insurance pricing was viewed as a positive development for clients, there were growing concerns over continuous increases in the property market, particularly in property catastrophe insurance. Marsh's president, Pat Donnelly, expressed these concerns in the statement accompanying the report, indicating that the trends in the property market might pose challenges in the future.

What HR needs to know about PBM reform

By Craig Stephens - HR leaders can ensure that employees are informed, engaged, and equipped to make the best possible decisions about their health care. As the United States at large — and employers, employee benefits leaders, and HR professionals in particular — continue struggling to ensure affordable health care, pharmacy benefit managers (PBMs) have recently come under scrutiny for their role in the high cost of prescription drugs. Read Full Article… 

VBA Article Summary

1. Potential Impact on Employer Health Care Costs: Spending on prescription drugs constitutes a substantial part of most companies' health care budgets, with almost 25% of costs associated with prescription drugs. Changes to PBM practices could dramatically influence the financial bottom line, and employees must be informed about what modifications are on the horizon.

2. Potential Impact on Employee Out-of-Pocket Costs: Many employees express frustration with increasing out-of-pocket health care expenses. PBM reforms, aimed at greater transparency and regulation, might reduce costs for employees. HR leaders must be at the forefront in elucidating how these adjustments will function and the potential benefits they will offer.

3. Potential Disruption in Health Care Services: PBM reforms may lead to alterations in the drugs covered through a company's health plan. This could necessitate changes in prescriptions or alternative therapies for employees. HR leaders need to communicate these changes proactively to alleviate any confusion or dissatisfaction among employees.

These points underscore the significance of HR leaders in both understanding the ongoing PBM reform legislation and being equipped to convey changes to employees and leadership within the company. Preparation for effective communication is vital, and strategies such as continuous education, providing platforms for employee feedback, and encouraging preventive care through incentives are essential tools in keeping employees informed and prepared for the potential impacts of PBM reform.

Medication Dispensing Errors and Prevention

By Rayhan A. Tariq, Rishik Vashisht, Ankur Sinha, and Yevgeniya Scherbak - Close to 6,800 prescription medications and countless over-the-counter drugs are available in the United States. To further complicate a practitioner's responsibility during patient care, there are thousands of health supplements, herbs, potions, and lotions used by the public regularly to treat their health problems. With the number of substances on the market, it is conceivable that mistakes can be made when practitioners prescribe or dispense drugs. Added to this is the high risk of interaction between substances. Read Full Article…

VBA Article Summary

1. Magnitude and Impact of Medication Errors:

   • Deaths and Reactions: Each year, between 7,000 and 9,000 deaths occur in the U.S. due to medication errors, with hundreds of thousands experiencing adverse reactions or complications.

   • Economic Costs: The financial burden of medication-associated errors is over $40 billion annually, affecting over 7 million patients.

   • Additional Consequences: Patients suffer physical and psychological pain, leading to decreased satisfaction and trust in the healthcare system.

2. Reasons for and Types of Medication Errors:

   • Common Reasons: Errors commonly occur due to communication failures, illegible handwriting, wrong selections, confusion over similar names or packaging, and dosing errors.

   • System Flaws: Medication errors may result from human mistakes but often stem from flawed systems without adequate backup to detect mistakes.

   • Types of Errors: Errors can occur at various stages, including prescribing, documenting, transcribing, dispensing, administering, and monitoring, with prescribing errors being the most common.

3. Definitions and Systematic Understanding:

   • Definitions: Several terms like Medication Error, Adverse Drug Reaction, Adverse Drug Event, Medication Misadventure, and Sentinel Event are defined to understand different aspects of the problem.

   • Stages and Issues: Errors can occur at many stages in patient care, and are grouped by different taxonomies by various organizations. Common system failures and error types are also described.

   • Preventability: The article emphasizes that though pervasive, the problem is largely preventable and requires attention to various aspects including communication, system design, and adherence to protocols and rules.

These points encapsulate the extent of the problem of medication errors, the underlying causes, and the various categorizations and considerations necessary to understand and address this critical healthcare issue.