FTC nominees face Senators' questions on pharmacy benefit managers, AI, mergers

By Maydeen Merino - Two Republican nominees for seats on the Federal Trade Commission were grilled at their Senate confirmation hearing Wednesday on how aggressively the FTC should regulate pharmacy benefit managers—the so called “middle men” in the pharmaceutical supply chain. Read Full Article…

VBA Article Summary

1. Nominees Support Aggressive Regulatory Stance: Melissa Holyoak and Andrew Ferguson, nominated for vacant Republican seats on the FTC, expressed support for a more aggressive stance in regulating the prescription drug industry, particularly regarding Pharmacy Benefit Managers (PBMs). Holyoak emphasizes the importance of affordable prescription drugs for Americans, while Ferguson highlights the complexity of the PBM market, suggesting decisive FTC action if deceptive practices are revealed.

2. FTC Reviewing Major PBMs: The FTC is in the process of scrutinizing the business practices of significant PBMs, including CVS Caremark, Express Scripts Inc., OptumRx Inc., Humana Inc., Prime Therapeutics LLC, and MedImpact Healthcare Systems Inc. This initiative aligns with the agency's intention to strengthen its regulatory approach with PBMs, as it had previously warned them against relying on outdated reports and studies that no longer accurately represent the consumer drug distribution market.

3. Nominees Respond to Broad Regulatory Concerns: Beyond PBMs, the Senate Committee questioned the nominees on other crucial issues, such as robocalls, artificial intelligence, and consumer data protection. Both nominees agreed on the importance of vigorous enforcement against robocalls, considering it a significant public complaint. Regarding artificial intelligence, Ferguson and Holyoak acknowledge the FTC's role in acting against violations while recognizing Congress's authority to establish a regulated framework. Holyoak asserts that the FTC is well-positioned to protect consumer data, suggesting that comprehensive privacy legislation might be necessary from Congress.

Biden Administration to Ban Medical Debt From Americans’ Credit Scores

By Noam N. Levey - The Biden administration announced a major initiative to protect Americans from medical debt on Thursday, outlining plans to develop federal rules barring unpaid medical bills from affecting patients’ credit scores. Read Full Article…

VBA Article Summary

1. Significant Relief for Consumers: The proposed regulations would provide significant relief to millions of Americans grappling with medical debt. With medical debt information eliminated from credit reports, consumers' credit scores would likely improve, easing their ability to secure employment, rent apartments, or obtain car loans. This action is crucial as medical debt disproportionately affects about 100 million Americans, compelling many to make substantial life and financial sacrifices. These new rules, therefore, represent a substantial federal move to alleviate the widespread burden of medical debt, providing immediate relief to individuals unfairly impacted by credit issues due to medical expenses.

2. Improved Credit Reporting Accuracy and Fairness: Researchers from the Consumer Financial Protection Bureau (CFPB) have discovered that medical debt does not precisely reflect a consumer's creditworthiness, undermining the validity of its presence on credit reports. The proposed regulations would address this discrepancy, creating a fairer and more accurate credit reporting system. Although the three leading credit agencies have initiated voluntary measures to exclude specific medical debts from credit reports, the proposed rules would enforce more comprehensive and standardized practices, extending protection to more consumers with larger medical bills.

3. Potential Challenges and Opposition: While consumer and patient advocacy groups widely applaud the new regulations, the proposals are expected to face opposition from the industry and political entities. Hospitals, debt collection agencies, and some political groups have voiced concerns about the potential unintended consequences of restricting medical debt reporting and collection, suggesting it may result in changes to payment requirements and practices by healthcare providers. The Biden administration’s initiative is an aggressive step toward reform, likely sparking debates and discussions on balancing consumer protection, the financial stability of medical providers, and the overall impact on the credit and healthcare systems.

Number of uninsured could rise under Biden's proposed three-month limit to short-term plans

By Susan Morse - The Biden administration's proposal to limit the duration of short-term health plans to three months would likely increase the uninsured rate, according to Mackenzie Wallace, a partner in Thompson Coburn's Dallas office. "Limiting the length of coverage could increase the uninsured population," Wallace said of the proposed three-month limit. Read Full Article…

VBA Article Summary

1. Risk to Vulnerable Populations: The proposed regulation to limit short-term health insurance plans to three months poses significant risks to younger adults, particularly those unemployed or with limited incomes, who are most at risk of being uninsured or underinsured. Individuals who anticipate regaining coverage quickly may find themselves unprotected, thereby increasing the number of people vulnerable to high out-of-pocket health costs. This regulation may inadvertently endanger those who are already financially disadvantaged and struggling to secure consistent healthcare coverage.

2. Financial Strain on Health Systems: Hospitals and health systems are expected to bear the financial burden as they often provide uncompensated care to uninsured or underinsured individuals. With the proposed shortening of short-term plan durations, more individuals might opt to risk being without coverage, anticipating they won't need medical care in the short term. This decision will likely lead to an increase in uncompensated care provided by health facilities, further straining their financial resources, as they may not aggressively pursue collections.

3. Controversy Over Coverage Duration: Critics argue that short-term plans lack several patient protections stipulated in the Affordable Care Act, including coverage for pre-existing conditions. The proposed regulation has also sparked controversy regarding the adequate duration of these short-term plans. While the Biden administration proposes a three-month limit with a possible one-month extension, opponents believe this period is insufficient, potentially leaving consumers unprotected. This regulation reverses the previous policy under the Trump administration, which allowed consumers access to low-cost, year-round coverage with short-term plans lasting up to 364 days, renewable for an additional two years.

Benefits outsourcing is declining—except in these two areas

By Dawn Kawamoto - In the past decade, the size of internal benefits teams has grown, meaning, not surprisingly, the amount of work being outsourced—like the administration of wellness and health plans, and defined contribution plans—has declined. But there are two major outliers. Read Full Article…

VBA Article Summary

1. Rise in Outsourcing COBRA and Pharmacy Benefits Administration: A significant increase has been noted in the outsourcing of COBRA and Pharmacy Benefits Administration since 2015. The International Foundation of Employee Benefit Plans reports a jump from 64% to 79% for COBRA administration and a 22-percentage point increase for pharmacy benefits, with around three-quarters of employers outsourcing these services. Despite a 38% increase in benefits staff over the past five years, these particular services are still primarily outsourced due to their complexity and the specialized expertise required to manage them effectively.

2. COBRA Administration Complexity and Outsourcing: The complexities inherent in COBRA administration make outsourcing a logical choice for many employers. Managing COBRA benefits is a complicated task due to the necessity of tracking employees no longer with the company, sending timely notices, and navigating a changing regulatory environment. Outsourcing these functions allows employers to avoid "point-solution fatigue" associated with the proliferation of digital health solutions, as indicated by Julie Stich, Vice President of Content at the International Foundation of Employee Benefit Plans.

3. Concerns and Changes in Pharmacy Benefits Administration Outsourcing: As employers grapple with soaring prescription drug costs, many are turning to Pharmacy Benefit Management companies (PBMs) or administration firms to help contain expenses. However, there is growing dissatisfaction and concern over the pricing methodologies used by PBMs, leading Congress to call for increased transparency and reforms in the process. The controversy surrounding PBMs may influence employers’ future decisions regarding outsourcing pharmacy benefits administration, with many closely watching the Congressional challenges and exploring alternative solutions, like the Mark Cuban CostPlus Drug Company.

Transparent PBMs form coalition to advance industry reforms

By Paige Minemyer - As pharmacy benefit managers and drug manufacturers once again sparred on the Hill, a group of transparent PBMs revealed that they had come together to form a coalition that drives industry reform. Read Full Article…

VBA Article Summary

1. Push for Comprehensive Reforms:

   Ban on Spread Pricing & Rebate Model Changes - Transparency-Rx advocates for crucial modifications to the Pharmacy Benefit Manager (PBM) model. These proposals include eliminating spread pricing, wherein PBMs charge insurers more than what pharmacies are reimbursed. The group also calls for overhauling the current rebate model, emphasizing the influence of Group Purchasing Organizations (GPOs).

   100% Pass-through Discount Model & Flat Fee Payment Structure - The coalition endorses a model where all discounts are passed directly to the patients, ensuring pricing transparency and fairness. It also promotes a “delinking” payment structure requiring PBMs to receive compensation through disclosed flat fees rather than percentage-based reimbursements, facilitating predictable and unbiased pricing.

   Tech-Enhanced Data Sharing - Transparency-Rx supports implementing technology that facilitates seamless data sharing among patients, insurers, pharmacists, and other stakeholders. This approach aims to foster informed decision-making and enhance coordination within the pharmaceutical supply chain.

2. Voice in Drug Pricing Debates:

   Diverse Coalition Seeking Representation - Led by Managing Director Joseph Shields, Transparency-Rx is comprised of founding members like AffirmedRx, Liviniti, MedOne, Navitus Health Solutions, RxPreferred Benefits, and SmithRx. These companies collectively represent 14.5 million lives across the U.S., unified in their goal to contribute significantly to ongoing drug pricing discussions and reforms.

   Proactive Participation in Legislative Processes - The coalition actively engages with lawmakers and the Biden administration, providing fresh perspectives and insights into the drug pricing debate. With 43 bills currently under consideration in Congress related to policy changes in both commercial and public sectors, Transparency-Rx seeks to play an instrumental role in shaping effective and balanced pharmaceutical policies.

3. Track Record of Success & Call for Expansion:

   Transparent PBM Market Benefits - LeAnn Boyd, CEO of Liviniti, highlights in a press release that a transparent, competitive, and efficient PBM market is not only feasible but already operational, benefiting patients, employers, and plans alike. Many reforms advocated by Transparency-Rx are reflected in the practices and innovations of transparent PBMs currently in the market.

   Scaling Up & Empowering Transparency - The group emphasizes the need for Congress to empower and scale transparency initiatives that are already proving successful. As they work to amplify their voice and impact in the industry, Transparency-Rx believes in the positive potential of transparency to revolutionize the drug pricing framework and deliver value to all stakeholders.

Benefits wake-up call to bosses

By Greg Marsh - Millions of workers are delaying major life changes because of the cost-of-living crisis and fears that they won’t be able to pay the mortgage as interest rates rise, according to a survey.* The research found that 21 per cent of people want to move jobs – but are currently postponing doing so. Read Full Article…

VBA Article Summary

1. Flight-Risk Employees on the Rise: Greg Marsh, CEO and Co-founder of Nous, highlights alarming research results showcasing that a substantial number of employees are considering leaving their current positions for higher salaries elsewhere, representing a significant flight risk. With the cost of living continuously rising, employees are seeking financial stability and are willing to change jobs to achieve it, leaving many companies at risk of experiencing mass resignations.

2. Balancing Salary and Competitiveness: Although increasing salaries may seem like an immediate solution to retain talent, Marsh warns that this approach can backfire. Higher salaries could lead businesses to increase the prices of their products or services to compensate, potentially resulting in loss of competitiveness in the market. Employers are thus in a precarious position, needing to balance employee retention with financial sustainability and market positioning.

3. Practical Employee Benefits as Retention Strategy: To mitigate the risk of employee departure, Marsh suggests employers should consider offering meaningful and practical employee benefits that address their real-life concerns and needs, rather than resorting to superficial perks. As many individuals are struggling with mortgage payments, shelving plans to move, and even making significant life decisions based on financial constraints, providing tangible help with household expenses can be a more effective retention strategy, aligning with the expectations and needs of the modern workforce.

How to Safely Integrate Large Language Models into Health Care

By Scott Gottlieb and Lauren Silvis, JD - Long before ChatGPT popularized the use of artificial intelligence (AI) for everyday interactions, AI devices were being used to enhance medical care. The primary applications in health care have been machine learning tools for interpreting clinical images and diagnostic test results in fields such as radiology, pathology, and cardiology. Read Full Article…

VBA Article Summary

1. Expanding AI-based Medical Devices: Over 500 AI-based medical devices have been authorized by the US Food and Drug Administration (FDA), showcasing their growing presence and significance in healthcare. Clinical decision-support tools, which leverage AI to interpret data and guide clinicians towards informed decisions, are increasingly becoming integral in delivering medical care. While some of these tools aren't directly regulated as medical devices, they play a pivotal role in screening and preventative care based on patients’ family history, genetic profiles, and previous test results.

2. Potential of Large Language Models (LLMs): LLMs, designed to comprehend and generate human language, are emerging as invaluable tools in healthcare. Unlike traditional AI, LLMs can process free-form text, making them potent instruments for enhancing patient interactions. Currently underutilized, LLMs hold promise for transforming diagnosis, treatment, and management of diseases by providing continuous, data-driven guidance to both patients and healthcare providers. For conditions like heart disease and diabetes, these models offer daily recommendations, allowing for improved disease management and patient outcomes. The integration of LLMs into healthcare will likely be most successful for conditions supported by extensive data and established clinical guidelines.

3. Challenges and Opportunities in Implementation: The adoption and effectiveness of AI and LLMs in healthcare depend on careful development, deployment, and regulation. Starting with diseases and conditions that are well-understood and supported by robust data can instill confidence among stakeholders and pave the way for broader application of these technologies. Addressing issues such as bias and data representation, unlocking and aggregating healthcare data while ensuring legality and interoperability, and fostering collaboration among healthcare systems are crucial steps towards realizing the potential of AI in healthcare. While the current LLMs in healthcare are primarily used as digital assistants, their functionality and application are expected to expand as the technology and regulatory landscape evolve.

Global benefits strategy: A Q&A with Katherine Loranger

By Cheryl Platzman Weinstock - Every year, HR teams and benefits pros have to prepare and execute a successful open enrollment. With the beginning of fall, it is time to prepare your company and make sure you have a global benefits strategy in place. Read Full Article…

VBA Article Summary

1. Challenges in Ensuring Compliance: The primary challenge for global HR teams during the open enrollment season is ensuring compliance across different countries, as each has distinct legal requirements for employee benefits, including payroll, parental leave, vacation, and healthcare plans. The variance in laws from Mexico to India to the UK exemplifies the difficulty in creating policies that are both compliant and competitive globally. Lack of updated information on global legal requirements for benefits can not only make the process stressful but also risk the company falling under government scrutiny, incurring fines, and damaging its reputation.

2. Strategies for Maintaining Compliance:

   Leveraging Local Expertise - Collaborating with local experts residing in the markets where employees are based can provide valuable insights to ensure compliance and help navigate cultural nuances and differences when dealing with in-country providers.

   Investing in Technology - Generative AI tools can help HR leaders in gathering and refining data for their benefits packages, making compliance easier by accessing thousands of data points across different regions, requirements, and regulations.

   Developing Global Benefits Strategy - A well-crafted global benefits strategy ensures that the company’s offerings are not only compliant but also competitive in every market they operate in.

3. Implementing a Global Benefits Strategy: The strategy should be designed considering the benefits philosophy of the company, answering vital questions about the organization’s identity and the kind of talent they aim to attract. The approach to benefits will significantly vary depending on whether a company wants to attract top talent in a competitive market or offer baseline programs in emerging markets. Implementation should involve collaboration between HR teams and company leaders, comprising steps like forming a committee, identifying objectives, developing guidelines, conducting audits, and securing buy-in from the organization’s leadership for the strategy to be successful.

90% of companies say they’ll return to the office by the end of 2024—but the 5-day commute is ‘dead,’ experts say

By Morgan Smith - The debate over whether or not to return to the office is far from settled — and yet, the push to get employees back to the office is getting more aggressive. Goldman Sachs wants employees in five days a week. Google is factoring employees’ in-office attendance into their performance reviews. Read Full Article…

VBA Article Summary

1. The Push for In-Office Work Resumes: According to an August report from Resume Builder, 90% of companies are set to enforce return-to-office policies by the end of 2024. The data, which encompasses responses from 1,000 company leaders, reveals that nearly a third of the companies will consider termination for employees not adhering to in-office mandates. Despite the insistence on physical presence, office occupancy has not seen significant increases, maintaining rates that are only marginally higher than last year's.

2. Executives’ Perspective on Remote Work: There is a tangible push from CEOs and company leaders to reintroduce and adhere to conventional in-office work routines. A considerable portion of executives believes that productivity, collaboration, and employee engagement are compromised in a remote work setting. This inclination to revert to in-person work is partially due to the leaders' struggle to envision a workspace that is not traditionally structured and is not primarily driven by logical reasoning but rather emotional and subjective perspectives on work dynamics and corporate culture.

3. Employees Favor Hybrid Models: In contrast to the executive push for in-office work, a substantial 68% of full-time employees express preference for a hybrid work model, according to a survey by Bankrate. This model would entail a combination of remote and in-office work days, offering greater flexibility to employees. Experts in the field argue against a rigid, five-days-a-week in-office schedule, warning that such an approach may foster resentment and erode trust between employees and the organization. The current trend indicates a leaning towards a structured hybrid work arrangement, with some sectors like tech, finance, and retail more inclined to enforce complete return-to-office due to various concerns including security.