1 00:00:00,358 --> 00:00:02,589 This is Jacob Emerson with the Becker payer 2 00:00:02,589 --> 00:00:03,465 issues podcast. 3 00:00:03,863 --> 00:00:06,173 Here's your Bi weekly industry news briefing for 4 00:00:06,333 --> 00:00:06,890 May twentieth. 5 00:00:07,544 --> 00:00:10,421 Opt is closing a change healthcare care facility 6 00:00:10,421 --> 00:00:11,620 in Toledo, Ohio, 7 00:00:12,259 --> 00:00:14,417 resulting in the termination of a hundred and 8 00:00:14,417 --> 00:00:17,468 29 employees located in Ohio or or working 9 00:00:17,468 --> 00:00:20,097 remotely. The layoffs at the 93000 10 00:00:20,097 --> 00:00:22,408 square foot facility will occur in 3 waves 11 00:00:22,408 --> 00:00:24,321 from July fifteenth to September 6, 12 00:00:25,053 --> 00:00:27,366 According to regulatory documents filed with the state 13 00:00:27,366 --> 00:00:28,424 on May sixteenth. 14 00:00:30,397 --> 00:00:33,029 United Health Group is facing a proposed securities 15 00:00:33,029 --> 00:00:35,596 fraud class action lawsuit. Alleging that the company 16 00:00:35,596 --> 00:00:38,011 failed to disclose that the justice department opened 17 00:00:38,069 --> 00:00:41,554 an antitrust investigation into the organization. The investor 18 00:00:41,833 --> 00:00:44,136 investigation come came into the public's attention in 19 00:00:44,216 --> 00:00:46,360 February when the Wall Street Journal and other 20 00:00:46,360 --> 00:00:48,982 news outlets reported that the justice department was 21 00:00:48,982 --> 00:00:51,858 investigating the relationships between the company's various segments, 22 00:00:52,177 --> 00:00:52,974 including Opt. 23 00:00:53,612 --> 00:00:56,344 Neither the Doj nor United Health has publicly 24 00:00:56,402 --> 00:00:57,381 acknowledged the 25 00:00:57,758 --> 00:01:00,643 investigation. As a result of those reports the 26 00:01:00,643 --> 00:01:03,193 price of United Health stock declined by 27 27 00:01:03,193 --> 00:01:06,221 dollars per share, erasing nearly 25000000000 28 00:01:06,221 --> 00:01:08,870 dollars in shareholder value. According to the lawsuit 29 00:01:08,870 --> 00:01:11,510 filed May fourteenth in a Minnesota Federal Court. 30 00:01:12,150 --> 00:01:14,730 The lawsuit from the city of Hollywood firefighters 31 00:01:14,950 --> 00:01:17,349 pension fund, alleges that United Health was aware 32 00:01:17,349 --> 00:01:20,128 of the investigation since at least October. 33 00:01:20,684 --> 00:01:22,988 The lawsuit said, quote, instead of disclosing this 34 00:01:22,988 --> 00:01:25,545 material investigation to investors or the public, 35 00:01:26,102 --> 00:01:29,682 United Health, executives sold more than 120000000 36 00:01:29,682 --> 00:01:32,164 dollars of their personally held United Health shares. 37 00:01:32,643 --> 00:01:34,160 In the 4 months between learning that the 38 00:01:34,240 --> 00:01:34,740 Doj 39 00:01:35,198 --> 00:01:37,194 investigation and the investigation becoming public, 40 00:01:37,832 --> 00:01:40,866 United Health Chairman, Stephen Hem, sold over a 41 00:01:40,866 --> 00:01:43,427 hundred million dollars of his personally held United 42 00:01:43,506 --> 00:01:46,446 Health shares. And Brian Thompson, the Ceo of 43 00:01:46,605 --> 00:01:49,323 United Healthcare sold over 15000000 dollars of his 44 00:01:49,323 --> 00:01:51,237 personally held United Health shares. 45 00:01:51,955 --> 00:01:54,268 Mister Ham and, Mister Thompson are named as 46 00:01:54,268 --> 00:01:56,820 defendants in the lawsuit. United Health group Ceo, 47 00:01:56,980 --> 00:01:59,308 Andrew Witty, who did not sell share was 48 00:01:59,308 --> 00:02:00,822 also named as a defendant. 49 00:02:02,894 --> 00:02:05,045 United Health Group executives also say that they're 50 00:02:05,045 --> 00:02:07,053 not planning any major shake up. To their 51 00:02:07,132 --> 00:02:10,159 Medicare Advantage Business as other insurers plan to 52 00:02:10,159 --> 00:02:12,707 pull back their offerings in 20 25. 53 00:02:13,265 --> 00:02:15,176 At May fourteenth investor presentation, 54 00:02:15,829 --> 00:02:18,222 Brian Thompson, the Ceo of United Healthcare said 55 00:02:18,222 --> 00:02:20,536 medical cost trends and rates from Cms are 56 00:02:20,536 --> 00:02:21,754 in line with the company's 57 00:02:22,131 --> 00:02:24,453 expectations. He said, quote, I'm really comfortable with 58 00:02:24,453 --> 00:02:26,201 what we'll put into the marketplace for next 59 00:02:26,201 --> 00:02:28,506 year, and pleased with how we're performing and 60 00:02:28,506 --> 00:02:30,572 what the opportunities are on the horizon for 61 00:02:30,572 --> 00:02:31,287 20 25. 62 00:02:31,938 --> 00:02:35,994 Medicare advantages facing major headwind, including including rising 63 00:02:35,994 --> 00:02:38,777 medical costs and lower reimbursement rates from Cms. 64 00:02:39,413 --> 00:02:42,372 2 of United Health major competitors, Cvs health 65 00:02:42,372 --> 00:02:45,003 and Human said they expect to lose members 66 00:02:45,003 --> 00:02:45,879 in 20 25. 67 00:02:46,358 --> 00:02:48,111 Both companies said they plan to exit counties 68 00:02:48,111 --> 00:02:49,626 where they do not expect to be profitable. 69 00:02:50,119 --> 00:02:51,868 And they may cut back benefits in some 70 00:02:51,868 --> 00:02:54,252 plans to account for rising medical costs. 71 00:02:54,888 --> 00:02:57,432 At the beginning, of 20 24, Cms implemented 72 00:02:57,432 --> 00:03:00,546 changes, the Medicare managed risk adjustment changes that 73 00:03:00,546 --> 00:03:01,897 the payer industry opposed. 74 00:03:02,533 --> 00:03:04,837 That model is being phased in over 3 75 00:03:04,837 --> 00:03:05,075 years. 76 00:03:06,919 --> 00:03:09,340 Well, great plains health, a health system 77 00:03:09,879 --> 00:03:11,719 headquartered a North Platt in Nebraska, 78 00:03:12,280 --> 00:03:15,159 plans to stop contracting with all Medicare advantage 79 00:03:15,159 --> 00:03:16,686 plans. In 20 25. 80 00:03:17,321 --> 00:03:20,022 That includes the systems clinics and independent practices, 81 00:03:20,261 --> 00:03:22,667 which will drop Cent blue across the shield 82 00:03:22,723 --> 00:03:23,859 and United Health 83 00:03:24,249 --> 00:03:26,406 care M plans in 20 25. 84 00:03:26,965 --> 00:03:29,362 The system said May sixteenth that it was 85 00:03:29,362 --> 00:03:31,850 in... Also encouraging patient stock opt for traditional 86 00:03:31,929 --> 00:03:34,975 Medicare in 20 25 to continue receiving care 87 00:03:35,191 --> 00:03:37,020 from great plains health providers. 88 00:03:37,975 --> 00:03:40,460 Opt This Health System's Chief Medical officer said 89 00:03:40,460 --> 00:03:42,133 that to put the patient first, we can 90 00:03:42,133 --> 00:03:43,886 no longer be under contract with the plan 91 00:03:43,886 --> 00:03:46,854 that causes significant delays and care, longer hospital 92 00:03:46,854 --> 00:03:48,854 stays and outright denials of care. 93 00:03:50,375 --> 00:03:52,694 And finally, Blue Cross Blue Shield, Michigan has 94 00:03:52,694 --> 00:03:54,866 named Tricia Keith as it's now president and 95 00:03:55,025 --> 00:03:56,935 Ceo effective in 20 25. 96 00:03:57,492 --> 00:03:59,323 Miss Keith is the first woman to lead 97 00:03:59,323 --> 00:04:01,892 the Detroit based payer, and she currently serves 98 00:04:02,044 --> 00:04:05,146 as executive Vice President, Coo and President of 99 00:04:05,146 --> 00:04:07,612 emerging markets. She's been with the company since 100 00:04:07,612 --> 00:04:08,567 2006. 101 00:04:09,139 --> 00:04:11,849 She succeeds Daniel Le, who is retiring after 102 00:04:11,849 --> 00:04:14,719 leaving leading the company for 17 years, 1 103 00:04:14,719 --> 00:04:17,245 of the longest serving Ceos across all blue 104 00:04:17,363 --> 00:04:18,314 across blue shield plans. 105 00:04:19,028 --> 00:04:20,851 If you like the latest health insurance industry 106 00:04:20,851 --> 00:04:22,753 news delivered straight to your inbox every morning, 107 00:04:23,228 --> 00:04:25,388 subscribe to the Becker payer issues e newsletter 108 00:04:25,388 --> 00:04:27,781 on our website at becker payer dot com.