1 00:00:00,119 --> 00:00:02,501 This is Jacob Emerson with the Becker payer 2 00:00:02,501 --> 00:00:03,454 issues podcast. 3 00:00:03,851 --> 00:00:06,550 Here's your bi weekly industry news briefing for 4 00:00:06,709 --> 00:00:07,527 June seventeenth. 5 00:00:08,392 --> 00:00:12,126 Cms has recalculate Medicare Advantage plans star ratings 6 00:00:12,126 --> 00:00:15,861 after insurers, challenging the agency's methodology were handed 7 00:00:15,861 --> 00:00:18,747 recent court injuries. In a memo sent to 8 00:00:18,827 --> 00:00:22,103 Medicare Advantage carriers on June thirteenth. The agency 9 00:00:22,103 --> 00:00:24,580 said it would recalculate plans star ratings for 10 00:00:24,580 --> 00:00:27,387 20 24 without eliminating extreme outliers. 11 00:00:28,105 --> 00:00:30,497 Back in early June, a judge ruled in 12 00:00:30,497 --> 00:00:32,809 favor of scan health plan, which sued over 13 00:00:32,809 --> 00:00:35,533 the agency's Star Ratings new methodology. 14 00:00:36,090 --> 00:00:38,318 Days later, a judge handed El health, a 15 00:00:38,318 --> 00:00:41,741 partial victory in a similar case. Both scan 16 00:00:41,741 --> 00:00:43,753 and El challenged Cms 17 00:00:44,540 --> 00:00:46,925 implementation of the tu key outlier rule, which 18 00:00:46,925 --> 00:00:50,128 eliminates extreme outliers from datasets used to calculate 19 00:00:50,184 --> 00:00:52,819 the star ratings, making its more difficult to 20 00:00:52,819 --> 00:00:53,771 achieve a high rating. 21 00:00:54,405 --> 00:00:56,624 Insurers had argued that Cms did not follow 22 00:00:56,624 --> 00:00:59,493 proper administrative procedures in implementing the route rule. 23 00:01:00,050 --> 00:01:02,993 Judges presiding over those 2 lawsuits ruled, the 24 00:01:02,993 --> 00:01:05,776 agency had violated the administrative procedure Act when 25 00:01:05,776 --> 00:01:08,415 it implemented the new methodology. Rule In the 26 00:01:08,415 --> 00:01:10,560 letter, Cms said it will revise star ratings 27 00:01:10,560 --> 00:01:13,578 for plans using 20 23 cut points. Cms 28 00:01:13,578 --> 00:01:15,881 will not decrease any plans ratings. 29 00:01:16,853 --> 00:01:19,008 Plans must achieve a 4 star rating or 30 00:01:19,008 --> 00:01:21,403 hired to receive quality bonus payments from Cms. 31 00:01:21,722 --> 00:01:23,558 The ratings determine how much plans will earn 32 00:01:23,558 --> 00:01:26,206 in bonus payments in 20 25 with some 33 00:01:26,206 --> 00:01:28,200 insurers standing to bring in millions more with 34 00:01:28,200 --> 00:01:29,237 the revised ratings. 35 00:01:29,795 --> 00:01:32,028 In its letter to plan directors, Cms said 36 00:01:32,028 --> 00:01:33,703 plans that see their star rating go up 37 00:01:33,703 --> 00:01:35,793 as a result of the change. Will have 38 00:01:35,793 --> 00:01:38,510 until June 20 eighth to revise their 20 39 00:01:38,510 --> 00:01:39,549 25 bids. 40 00:01:41,067 --> 00:01:42,959 Well Blue Cross Blue Shield of Michigan says 41 00:01:43,079 --> 00:01:45,233 it will no longer cover Gl 1 drugs 42 00:01:45,233 --> 00:01:46,371 to treat obesity 43 00:01:46,749 --> 00:01:47,946 beginning this January. 44 00:01:48,344 --> 00:01:50,752 A spokesperson for Michigan's largest and sure told 45 00:01:50,912 --> 00:01:52,984 Bloomberg that it will drop coverage of Gl 46 00:01:52,984 --> 00:01:55,454 1 drugs for weight loss under its fully 47 00:01:55,454 --> 00:01:58,659 insured large group commercial health plans. That change 48 00:01:58,659 --> 00:02:00,357 will affect nearly 10000 49 00:02:00,416 --> 00:02:00,736 members. 50 00:02:01,695 --> 00:02:04,331 A spokesperson for the company cited concerns over 51 00:02:04,331 --> 00:02:07,625 safety, effectiveness, and costs as the reason for 52 00:02:07,625 --> 00:02:08,185 the decision. 53 00:02:08,824 --> 00:02:10,025 Back in March, Bc, 54 00:02:10,344 --> 00:02:14,104 Michigan reported its pharmaceutical costs increased by 1800000000.0 55 00:02:14,104 --> 00:02:15,396 dollar in 20 23, 56 00:02:15,954 --> 00:02:17,469 including a 350000000 57 00:02:17,469 --> 00:02:20,840 dollar increase in Gl 1 costs. Gl 1 58 00:02:20,898 --> 00:02:23,585 medications can cost upward to 15000 dollars versus 59 00:02:23,704 --> 00:02:24,021 a year. 60 00:02:25,293 --> 00:02:26,643 Research published by the Bc 61 00:02:27,120 --> 00:02:29,662 Association in May found that nearly 06:10 adults 62 00:02:29,662 --> 00:02:31,583 prescribed a Gl 1 of a drug for 63 00:02:31,583 --> 00:02:32,242 weight loss 64 00:02:32,616 --> 00:02:35,236 discontinue the drug before seeing any meaningful clinical 65 00:02:35,236 --> 00:02:35,736 benefits. 66 00:02:37,539 --> 00:02:39,703 Well, speaking of weight loss drugs around 1 67 00:02:39,703 --> 00:02:42,180 in 3 employers covering Gl ones for weight 68 00:02:42,180 --> 00:02:44,577 loss in 20 23. 1 in 3 employers 69 00:02:44,577 --> 00:02:47,225 now are. A survey from the international, foundation 70 00:02:47,225 --> 00:02:50,243 of employee benefit plans found. In 20 23, 71 00:02:50,482 --> 00:02:53,421 34 percent of employers surveyed cover Gl ones 72 00:02:53,421 --> 00:02:55,662 for weight loss, and 57 pro percent covered 73 00:02:55,662 --> 00:02:58,313 the drug to treat type 2 diabetes. 74 00:02:58,770 --> 00:03:00,602 The number of employers covering the cost of 75 00:03:00,602 --> 00:03:02,913 the drugs for weight laws increased from 28 76 00:03:02,913 --> 00:03:04,427 percent in 20 22. 77 00:03:04,905 --> 00:03:08,191 So The nonprofit educational platform survey was published 78 00:03:08,271 --> 00:03:11,941 June port thirteenth and pulled 279 79 00:03:11,941 --> 00:03:12,753 large. Lawyers. 80 00:03:14,664 --> 00:03:16,815 Well, in El Health executives said the company 81 00:03:16,815 --> 00:03:19,443 is comfortable with its Medicare Advantage business as 82 00:03:19,443 --> 00:03:21,927 other major insurers project loss lawyers in the 83 00:03:21,927 --> 00:03:22,246 market. 84 00:03:22,804 --> 00:03:24,955 Speaking of the Goldman Sachs Healthcare conference on 85 00:03:25,115 --> 00:03:28,621 June twelfth. El Vice President of Investor Relations 86 00:03:28,621 --> 00:03:31,501 said The company is comfortable predicting market plus 87 00:03:31,501 --> 00:03:34,366 growth for the company's Medicare Advantage business in 88 00:03:34,366 --> 00:03:35,162 20 25. 89 00:03:35,560 --> 00:03:37,804 Now exact growth is difficult to predict without 90 00:03:37,804 --> 00:03:40,590 knowing what El competitors are offering next year, 91 00:03:40,908 --> 00:03:42,818 but the company could pick up members who 92 00:03:42,818 --> 00:03:45,941 leave other insurers. Difficult Medicare Advantage market of 93 00:03:45,941 --> 00:03:48,971 course is facing 2 major headwind, rising medical 94 00:03:48,971 --> 00:03:52,481 costs and utilization among the M population and 95 00:03:52,481 --> 00:03:54,337 reduced reimbursement from Cms. 96 00:03:54,967 --> 00:03:57,272 Cbs and Human men have both said they 97 00:03:57,272 --> 00:03:59,816 will exit some markets next year and potentially 98 00:03:59,816 --> 00:04:01,905 reduce benefit offerings to accommodate 99 00:04:02,280 --> 00:04:03,392 those rising costs. 100 00:04:04,201 --> 00:04:07,688 Sea Cvs has predicted Ae could lose 10 101 00:04:07,688 --> 00:04:09,749 percent of its M membership next year. 102 00:04:10,700 --> 00:04:11,200 El 103 00:04:11,589 --> 00:04:13,906 expects its Medicare Advantage business to be profitable 104 00:04:13,906 --> 00:04:16,942 in 20 24, though below the company's target 105 00:04:16,942 --> 00:04:19,752 margin. United Health has also maintains. Did is 106 00:04:19,752 --> 00:04:21,982 well positioned to weather market headwind. 107 00:04:22,699 --> 00:04:24,610 Executives there told investors in May that the 108 00:04:24,610 --> 00:04:27,079 company is comfortable with its M positioning for 109 00:04:27,079 --> 00:04:30,065 20 25 and but were non commit on 110 00:04:30,123 --> 00:04:30,841 growth numbers. 111 00:04:32,596 --> 00:04:35,169 A large group of Us lawmakers have introduced 112 00:04:35,308 --> 00:04:37,700 legislation aimed at reforming the Medicare Advantage prior 113 00:04:37,700 --> 00:04:41,137 auth authorization process. The legislation is an updated 114 00:04:41,137 --> 00:04:44,159 version of legislation that passed the house of 115 00:04:44,159 --> 00:04:46,800 representatives in 20 22 but stalled in the 116 00:04:46,800 --> 00:04:47,118 senate. 117 00:04:47,675 --> 00:04:50,141 If Bass, that bill would establish an electronic 118 00:04:50,141 --> 00:04:53,483 prior authorization process for M plans, including a 119 00:04:53,483 --> 00:04:54,095 standardized 20 120 00:04:55,175 --> 00:04:58,295 standardization for transactions and clinical attachments, it would 121 00:04:58,295 --> 00:05:01,995 include increased transparency around M prior authorization requirements 122 00:05:02,055 --> 00:05:02,615 and use. 123 00:05:03,269 --> 00:05:04,007 It would clarify 124 00:05:04,462 --> 00:05:07,882 Hhs authority to establish time frames for electronic 125 00:05:07,882 --> 00:05:11,324 prior authorization requests, including but expedited did determinations, 126 00:05:11,485 --> 00:05:13,805 real time decisions for between the approved items 127 00:05:13,805 --> 00:05:14,444 and services, 128 00:05:14,764 --> 00:05:17,504 and other prior auth requests. It also 129 00:05:17,978 --> 00:05:21,646 expand beneficiary protections to improve enroll experiences and 130 00:05:21,646 --> 00:05:23,878 outcomes, and it would require Hhs and other 131 00:05:23,878 --> 00:05:26,510 federal agencies to report to congress on program, 132 00:05:26,764 --> 00:05:29,500 integrity efforts and other ways to further improve 133 00:05:29,558 --> 00:05:31,954 the electronic prior authorization process. 134 00:05:32,433 --> 00:05:33,949 That bill is sponsored by a hundred and 135 00:05:33,949 --> 00:05:36,399 30 members in the house and 42. And 136 00:05:36,519 --> 00:05:36,916 senators. 137 00:05:38,585 --> 00:05:40,970 In response to the February, Ransom attack on 138 00:05:40,970 --> 00:05:44,149 change healthcare, Cms is introducing special measures to 139 00:05:44,149 --> 00:05:47,899 assist affected organization in navigating the federal independent 140 00:05:47,899 --> 00:05:50,760 dispute resolution process under the no surprises Act. 141 00:05:51,396 --> 00:05:54,575 Cms reported receiving numerous complaints from healthcare providers 142 00:05:54,575 --> 00:05:56,677 since facilities and air ambulance services 143 00:05:57,050 --> 00:05:58,503 about difficulties in 144 00:05:59,273 --> 00:06:02,607 initiating open negotiation. These challenges are due disruptions 145 00:06:02,607 --> 00:06:05,732 in receiving ness necessary payment information and disclosures 146 00:06:05,732 --> 00:06:08,768 from plans or issuers caused by the change 147 00:06:08,768 --> 00:06:11,060 of cybersecurity incident, which has 148 00:06:11,499 --> 00:06:14,136 significantly delayed claims processing nationwide. 149 00:06:14,615 --> 00:06:17,332 To address these issues, Cms designated a special 150 00:06:17,332 --> 00:06:21,331 period for affected organizations These entities can initiate 151 00:06:21,331 --> 00:06:23,636 open negotiation for any service provided on or 152 00:06:23,636 --> 00:06:26,419 after January first at any time from June 153 00:06:26,419 --> 00:06:28,248 fourteenth to October twelfth. 154 00:06:28,899 --> 00:06:31,540 This special period applies regardless of when they 155 00:06:31,540 --> 00:06:33,379 received payment or denial notices. 156 00:06:34,259 --> 00:06:36,899 To utilize this special period, parties must submit 157 00:06:36,899 --> 00:06:39,382 an anti station form along with the standard 158 00:06:39,382 --> 00:06:41,370 open negotiation negotiation form, 159 00:06:42,086 --> 00:06:43,222 certifying that the incident 160 00:06:43,676 --> 00:06:45,846 impacted their ability to start open 161 00:06:46,301 --> 00:06:46,460 negotiation. 162 00:06:48,230 --> 00:06:49,669 Let edison us, new Jersey based Hack and 163 00:06:49,750 --> 00:06:52,230 Sack Meridian Health and Ae, they'll be out 164 00:06:52,230 --> 00:06:54,490 of network on July first without a new 165 00:06:54,550 --> 00:06:57,520 contract in place. Ae Medicare Advantage members could 166 00:06:57,520 --> 00:06:59,983 lose coverage July first across hack and Sa, 167 00:07:00,300 --> 00:07:02,604 18 hospitals along with the systems urgent care 168 00:07:02,604 --> 00:07:05,026 centers, outpatient clinics and 7000 169 00:07:05,241 --> 00:07:08,023 physicians. Ae members with self insured plans will 170 00:07:08,023 --> 00:07:09,692 be out of network on September 20 ninth. 171 00:07:10,169 --> 00:07:12,883 Members with fully insured plants which include employer 172 00:07:12,883 --> 00:07:15,182 and Aca plans will be out of network 173 00:07:15,182 --> 00:07:16,609 on October 20 ninth. 174 00:07:17,402 --> 00:07:19,638 And finally, Blue Shield of California has Na 175 00:07:19,638 --> 00:07:22,266 day contract, managing care for 400000 176 00:07:22,425 --> 00:07:24,040 California state employees. 177 00:07:24,735 --> 00:07:26,964 Blue Shield won out over Anthem Blue Cross, 178 00:07:27,124 --> 00:07:29,290 which has held the extra more than 2 179 00:07:29,290 --> 00:07:29,689 decades. 180 00:07:30,167 --> 00:07:33,038 That contract is for the California Public employee's 181 00:07:33,038 --> 00:07:34,016 retirement system 182 00:07:34,393 --> 00:07:36,865 for its Ppo contract. Cal, 183 00:07:37,359 --> 00:07:39,114 provides health coverage to 1 and a half 184 00:07:39,114 --> 00:07:41,508 million current and retired state employees. 185 00:07:42,067 --> 00:07:44,780 The Ppo contract covers 250000 186 00:07:44,780 --> 00:07:47,415 employee in basic Ppo plans and a hundred 187 00:07:47,415 --> 00:07:50,589 and 50000 with Medicare supplement coverage. The 5 188 00:07:50,589 --> 00:07:53,129 year contract will begin in 20 25. 189 00:07:53,605 --> 00:07:55,933 These The agency also awarded a contract to 190 00:07:55,933 --> 00:07:58,724 included health to provide virtual care and population 191 00:07:58,724 --> 00:07:59,602 health management. 192 00:08:00,080 --> 00:08:02,712 The new contract with Blue Shield includes risk 193 00:08:02,712 --> 00:08:05,438 based thresholds, for medical cost trends and outcomes. 194 00:08:05,996 --> 00:08:09,026 Blue shield and included health will put 464000000 195 00:08:09,026 --> 00:08:10,939 dollars at risk if they do not meet 196 00:08:10,939 --> 00:08:11,736 cost trend goals. 197 00:08:12,309 --> 00:08:14,866 The contracts set the initial medical cost trend 198 00:08:14,866 --> 00:08:17,103 target at 5 and a half percent in 199 00:08:17,103 --> 00:08:17,902 20 25, 200 00:08:18,221 --> 00:08:20,312 and that will low lower each year until 201 00:08:20,312 --> 00:08:23,101 it reaches a 3 percent in 20 29. 202 00:08:24,057 --> 00:08:25,889 If you like the latest health insurance industry 203 00:08:25,889 --> 00:08:28,439 news delivered straight inbox every morning, subscribe to 204 00:08:28,439 --> 00:08:30,766 the Becker payer issues e newsletter on our 205 00:08:30,766 --> 00:08:32,681 website at becker payer dot com.