This is Jacob Ever with the Becker payer
issues podcast.
Here's your bi weekly industry news briefing for
July fifteenth.
United Health Group and several of the company's
leaders are facing a shareholder derivative lawsuit, alleging
they failed to disclose the justice department opened
and antitrust investigation into the company.
The investigation came to the public's attention in
February when the Will Street Journal and other
national News Outlets reported. That the Doj
is investigating the relationships between the company's various
segments,
Including between the United healthcare and Opt. Neither
the Doj nor United health has publicly acknowledged
the
investigation.
Following the news, the price of United Health
stock dropped 12 percent
on February 20 sixth.
The stock price continued to decline the following
day, closing at just under 500 dollars per
share. The suits filed in a Minnesota of,
federal court. Alleges the individual defendants breached their
fiduciary duties by issuing, causing the issuance of
and or failing to correct federal The materially
false and misleading statements and emissions of material
fact to the investing public.
It further alleges the company never. Established proper
firewalls
between Opt and United as required by its
own policy. And as it told a court
when the Doj took the company to trial
in 20 22
in its unsuccessful attempts to block Opt
acquisition of Change Health care. Among the 11
individual defendants named in the lawsuit our United
Healthcare group Ceo, Andrew Witty, Chairman Steven Hem,
and United Healthcare Ceo, Brian Thompson, named The
lawsuit alleges that the United Health officials were
aware of the investigation since at least October
in that 4 month period, mister Hem and
mister Thompson, are accused of selling substantial amounts
of their personally held United health stock, while
in possession of material material non public information.
Because
Well, current and former Cent board members along
with former senior executives
have beat a pension fund derivative lawsuits, alleging
the company over build state Medicaid programs for
pharmacy services.
When Cent acquired Health net back in twenties
16, the company received favorable reimbursement and discounts
for prescription drugs because of health that's contract
with Cvs Care mark according to the lawsuit.
16 The payer allegedly did not disclose its
arrangements with Cvs and instead reported inflated expenditures
to state Medicaid agencies, thereby over charging them.
Cent has settled with at least 15 states
over the issue. The company created a 1250000000.00
dollar reserve to pay for those. Settlements back
in 20 21.
In 20 23 cent...
Agreed to pay California 215000000
dollars, which is the largest of those settlements
to date.
The lawsuits was directed at 5 of Cent
10 current directors, along with 7 former directors
and senior executives to It was filed by
the Brook pension fund of Western Pennsylvania and
sought damages for alleged breaches of fiduciary duty
and unjust enrichment.
Well Ae failed to accurately calculate qualified payment
amounts for air ambulance services. According to Cms
is first audit of an insurers, no surprises
act compliance. The audit was issued in at
the end of May and examined the rates
that Ae
in Texas charged for an out of network
air ambulance provider between January and June of
20 22.
The no surprise Act requires payers to calculate
a qualified payment rate for out of network
emergency services. This rate is generally the median
contracted rate the insurer has with other providers
for similar services in the area.
Cms Audit found that Ae used the wrong
methodology to calculate the qualified payment rates, calculating
the amount based on claims paid rather than
contracted rates. In its audit, Cms instructed at
them to conduct a self audit involved the
qualified payment amounts it calculated for air ambulance
services in Texas during the audit period and
to refund members if their cost sharing should
have been lower based on the correct payment
amount. The agency also found that an failed
to give providers required notice that they may
initiate the independent dispute resolution process within 4
days after the end of the open negotiation
process.
And now also failed to share the qualified
payment amount to calculated 2 providers
in notice or denial of payments.
A spokesperson for Ae said that this routine
audit took place during the first 6 months
of 20 22 following the initial implementation of
the requirements. The company addressed all the reports
findings to Cms at Status of fashion.
Cms said, and it could be subject to
more audits of its payment rates in the
future. That audit is the first examination, Cms
has published on an insurance compliance with the
no surprise Act, which passed at the end
of 20 20 in congress in an effort
to end surprise medical bills for emergence. Seek
care.
1 Blue Cross Blue shield plan has lost
in federal court for terminated an employee that
refused to get vaccinated to get Covid 19,
and other insurers are facing similar lawsuits.
On June 20 eighth, the federal jury awarded
a former employee with Blue Cross the Shield
of Tennessee.
She was awarded nearly 700000
dollars after she approved that her refusal to
get vaccinated
in 20 21,
Was based upon a sincerely held religious belief,
and Bc of Tennessee did not prove that
it had offered a reasonable
accommodation to her.
Related class action lawsuit from former employees with
the company is also ongoing.
Then in July, a federal judge in Michigan
denied a Bc Michigan's subsidiaries, motion to dismiss
claims from former employees who said they were
terminated it after asking for religious accommodations when
the company instituted a covid vaccine mandate in
20 21.
The judge there found it reasonable to infer
that, quote,
discrimination occurred, and was at least a motivating
factor in employee's
termination at Bc.
In September, the equal employment opportunity commission sued
United healthcare over allegations, the company just discriminated
against a fully remote employee, but refusing to
grant her religious exemption from the company's Covid
vaccination requirement.
Following a Supreme court decision in 20 23,
the federal government through the
Has a greater opportunity than ever at winning
these lawsuits.
The agency has also seen a major increase
in vaccine based religious complaints from employees in
recent years.
Well Sioux falls, South Dakota bay, Sanford Health
and Marsh Wisconsin clinic health system have signed
a non binding agreement to merge into a
56 hospital system with more than 56000
employees.
The proposed
transaction would combine 2 physician driven health systems
to include 271
locations, multiple specialty pharmacies,
research institutions, and 2 fully integrated health plans,
Sanford health plan and security health plan, which
serve more than 425000
members collectively.
If the deal closes the national of the
parent company will be Sanford Health and will
be headquartered in sioux falls. The transaction is
expected to close by the end of the
year subject to regulatory process. And and closing
approvals.
And finally, a North Carolina state court has
sided with the state in its decision to
award Ae its health plan contract for public
employees
over Blue Cross Blue Shield of North Carolina.
Starting in 20 25, Ae will take over
a 3 year initial contract 742000
North Carolina state employees, retirees, and their dependents.
That contract can be extended up to 5
years in total for and it manages about
3000000000 dollars in medical claims per year. The
10 member state board that oversees the plan
voted unanimously in 20 20. To to switch
administrators. Ae was 1 of 3 companies to
bid for the State's health plan while Bc
and United Health lost out
Bc had held that contract for over 40
years and filed a legal challenge against the
decision in 20 23.
If you'd like the latest health insurance industry
used, over to straight your inbox every morning.
Subscribe to the Becker payer issues e newsletter
on our website, matt becker payer dot com.
Ever