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This is Jacob Ever with the Becker payer

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issues podcast.

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Here's your bi weekly industry news briefing for

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July fifteenth.

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United Health Group and several of the company's

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leaders are facing a shareholder derivative lawsuit, alleging

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they failed to disclose the justice department opened

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and antitrust investigation into the company.

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The investigation came to the public's attention in

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February when the Will Street Journal and other

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national News Outlets reported. That the Doj

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is investigating the relationships between the company's various

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segments,

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Including between the United healthcare and Opt. Neither

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the Doj nor United health has publicly acknowledged

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the

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investigation.

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Following the news, the price of United Health

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stock dropped 12 percent

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on February 20 sixth.

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The stock price continued to decline the following

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day, closing at just under 500 dollars per

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share. The suits filed in a Minnesota of,

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federal court. Alleges the individual defendants breached their

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fiduciary duties by issuing, causing the issuance of

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and or failing to correct federal The materially

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false and misleading statements and emissions of material

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fact to the investing public.

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It further alleges the company never. Established proper

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firewalls

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between Opt and United as required by its

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own policy. And as it told a court

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when the Doj took the company to trial

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in 20 22

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in its unsuccessful attempts to block Opt

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acquisition of Change Health care. Among the 11

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individual defendants named in the lawsuit our United

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Healthcare group Ceo, Andrew Witty, Chairman Steven Hem,

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and United Healthcare Ceo, Brian Thompson, named The

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lawsuit alleges that the United Health officials were

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aware of the investigation since at least October

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in that 4 month period, mister Hem and

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mister Thompson, are accused of selling substantial amounts

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of their personally held United health stock, while

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in possession of material material non public information.

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Because

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Well, current and former Cent board members along

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with former senior executives

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have beat a pension fund derivative lawsuits, alleging

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the company over build state Medicaid programs for

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pharmacy services.

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When Cent acquired Health net back in twenties

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16, the company received favorable reimbursement and discounts

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for prescription drugs because of health that's contract

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with Cvs Care mark according to the lawsuit.

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16 The payer allegedly did not disclose its

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arrangements with Cvs and instead reported inflated expenditures

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to state Medicaid agencies, thereby over charging them.

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Cent has settled with at least 15 states

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over the issue. The company created a 1250000000.00

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dollar reserve to pay for those. Settlements back

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in 20 21.

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In 20 23 cent...

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Agreed to pay California 215000000

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dollars, which is the largest of those settlements

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to date.

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The lawsuits was directed at 5 of Cent

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10 current directors, along with 7 former directors

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and senior executives to It was filed by

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the Brook pension fund of Western Pennsylvania and

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sought damages for alleged breaches of fiduciary duty

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and unjust enrichment.

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Well Ae failed to accurately calculate qualified payment

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amounts for air ambulance services. According to Cms

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is first audit of an insurers, no surprises

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act compliance. The audit was issued in at

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the end of May and examined the rates

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that Ae

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in Texas charged for an out of network

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air ambulance provider between January and June of

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20 22.

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The no surprise Act requires payers to calculate

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a qualified payment rate for out of network

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emergency services. This rate is generally the median

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contracted rate the insurer has with other providers

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for similar services in the area.

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Cms Audit found that Ae used the wrong

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methodology to calculate the qualified payment rates, calculating

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the amount based on claims paid rather than

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contracted rates. In its audit, Cms instructed at

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them to conduct a self audit involved the

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qualified payment amounts it calculated for air ambulance

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services in Texas during the audit period and

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to refund members if their cost sharing should

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have been lower based on the correct payment

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amount. The agency also found that an failed

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to give providers required notice that they may

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initiate the independent dispute resolution process within 4

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days after the end of the open negotiation

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process.

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And now also failed to share the qualified

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payment amount to calculated 2 providers

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in notice or denial of payments.

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A spokesperson for Ae said that this routine

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audit took place during the first 6 months

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of 20 22 following the initial implementation of

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the requirements. The company addressed all the reports

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findings to Cms at Status of fashion.

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Cms said, and it could be subject to

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more audits of its payment rates in the

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future. That audit is the first examination, Cms

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has published on an insurance compliance with the

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no surprise Act, which passed at the end

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of 20 20 in congress in an effort

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to end surprise medical bills for emergence. Seek

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care.

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1 Blue Cross Blue shield plan has lost

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in federal court for terminated an employee that

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refused to get vaccinated to get Covid 19,

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and other insurers are facing similar lawsuits.

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On June 20 eighth, the federal jury awarded

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a former employee with Blue Cross the Shield

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of Tennessee.

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She was awarded nearly 700000

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dollars after she approved that her refusal to

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get vaccinated

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in 20 21,

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Was based upon a sincerely held religious belief,

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and Bc of Tennessee did not prove that

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it had offered a reasonable

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accommodation to her.

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Related class action lawsuit from former employees with

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the company is also ongoing.

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Then in July, a federal judge in Michigan

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denied a Bc Michigan's subsidiaries, motion to dismiss

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claims from former employees who said they were

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terminated it after asking for religious accommodations when

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the company instituted a covid vaccine mandate in

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20 21.

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The judge there found it reasonable to infer

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that, quote,

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discrimination occurred, and was at least a motivating

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factor in employee's

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termination at Bc.

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In September, the equal employment opportunity commission sued

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United healthcare over allegations, the company just discriminated

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against a fully remote employee, but refusing to

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grant her religious exemption from the company's Covid

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vaccination requirement.

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Following a Supreme court decision in 20 23,

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the federal government through the

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Has a greater opportunity than ever at winning

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these lawsuits.

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The agency has also seen a major increase

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in vaccine based religious complaints from employees in

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recent years.

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Well Sioux falls, South Dakota bay, Sanford Health

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and Marsh Wisconsin clinic health system have signed

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a non binding agreement to merge into a

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56 hospital system with more than 56000

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employees.

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The proposed

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transaction would combine 2 physician driven health systems

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to include 271

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locations, multiple specialty pharmacies,

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research institutions, and 2 fully integrated health plans,

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Sanford health plan and security health plan, which

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serve more than 425000

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members collectively.

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If the deal closes the national of the

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parent company will be Sanford Health and will

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be headquartered in sioux falls. The transaction is

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expected to close by the end of the

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year subject to regulatory process. And and closing

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approvals.

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And finally, a North Carolina state court has

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sided with the state in its decision to

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award Ae its health plan contract for public

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employees

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over Blue Cross Blue Shield of North Carolina.

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Starting in 20 25, Ae will take over

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a 3 year initial contract 742000

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North Carolina state employees, retirees, and their dependents.

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That contract can be extended up to 5

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years in total for and it manages about

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3000000000 dollars in medical claims per year. The

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10 member state board that oversees the plan

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voted unanimously in 20 20. To to switch

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administrators. Ae was 1 of 3 companies to

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bid for the State's health plan while Bc

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and United Health lost out

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Bc had held that contract for over 40

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years and filed a legal challenge against the

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decision in 20 23.

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If you'd like the latest health insurance industry

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used, over to straight your inbox every morning.

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Subscribe to the Becker payer issues e newsletter

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on our website, matt becker payer dot com.

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Ever