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This is Jacob Emerson with the Becker's payer

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issues podcast.

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Here's your biweekly industry news briefing for August

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7th.

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CVS Health CEO Karen Lynch is taking over

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leadership of Aetna after a difficult year for

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the health insurer.

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The company reported its Q2 earnings,

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August 7th. Revenue in CVS's health care benefits

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segment dropped 40% from the Q2 of last

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year. Brian Kane, now the former president of

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Aetna, is no longer with the company.

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Miss Lynch said that they are disappointed by

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the current performance at Aetna and outlook for

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the health care benefit segment, and she has

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decided to make leadership changes effective immediately.

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Mister Cain was appointed EVP and CEO of

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Aetna last year after serving as CFO of

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Humana.

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CVS has faced challenges in its health benefits

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business recently, especially in the Medicare Advantage segment.

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The company expects to lose up to 10%

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of its MA members next year as it

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cuts benefits to recover margins. The company lowered

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its earnings got its earnings guidance for 2024

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based on the performance of its health care

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benefits segment.

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Miss Lynch said that she and

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CVS's CFO, Tom Caughey, will assume day to

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day leadership of Aetna until a new president

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is named.

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CVS is also planning to cut $2,000,000,000

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in expenses in the coming years, a plan

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that includes further streamlining the company's portfolio and

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using AI tools and automation.

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While Centene will exit a handful of Medicare

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Advantage Markets next year, will continue to offer

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prescription drug plans in those states.

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But we'll continue to offer prescription drug plans

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in those states.

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Novant Health is looking to acquire a 200

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provider urgent care group from Blue Cross Blue

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Shield of South Carolina.

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Novant entered into a definitive agreement with BCBS

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on July 19th to purchase UCI Medical Affiliates,

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which includes its affiliates, Doctors Care and Progressive

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Physical Therapy.

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Doctors Care is an urgent care network established

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in Columbia, South Carolina in 1981.

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It employs 1100 people with nearly 200 providers

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focused on urgent care, family care, occupational medicine,

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and employee wellness.

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That transaction

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is expected to close in the Q4.

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Terms were not disclosed.

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Well, Blue Cross Blue Shield of Louisiana is

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rebranding as Louisiana Blue. The BCBS affiliate will

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keep Blue Cross Blue Shield as its formal

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name, but will use Louisiana Blue in marketing,

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promotions, and public facing materials.

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The change is one of a few pits

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the insurer has made after its proposed sale

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to Elevance Health fell through.

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In May, the company appointed Brian Camrelink as

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its next CEO.

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In February, BCBS scrapped the proposed sale to

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Elavance after the deal faced a lot of

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scrutiny from physicians and state officials.

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UnitedHealth Care will launch its national gold carding

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program on October 1st.

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That program will reward contracted provider groups that

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consistently adhere to evidence based care guidelines. That's

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according to an August 1st policy update from

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United.

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The program will apply to all of United's

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commercial, individual, Medicare Advantage, and community, which is

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Medicaid,

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plans. The payer said the details on how

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to determine whether a provider group is qualified

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for the program

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will be published September 1st.

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UnitedHealth Group is suing the state of Minnesota

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over a new law that bans for profit

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Medicaid managed care providers from participating in the

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state's Medicaid program.

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United alleged that Minnesota lawmakers violated the state's

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constitution by passing a quote jumbo omnibus at

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the end of its legislative session. The ban

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on health maintenance organizations

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that turn a profit was included in a

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bill that included provisions on vaccines, traffic cameras,

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college admission requirements, and several other changes outside

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of the health care industry.

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United wrote or its attorneys wrote that none

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of the legislators had time to read it,

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much less any members of the public or

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press, nor were legislators given time for debate.

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The jumbo jumbo omnibus was on the floor

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of each chamber for barely 10 minutes, and

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it was passed on a party line vote

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minutes before midnight.

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Minnesota had banned for profit companies from participating

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in its Medicaid program until 2017 when it

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then reversed course.

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United was awarded a contract to manage care

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for Minnesota enrollees in 2022.

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And then in June, the Minnesota Department of

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Human Services informed United that its contract would

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be terminated at the end of 2024

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due to the new law.

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Well, encircleRx,

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a program from Cigna helping employers control the

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cost of GLP-one drugs for weight loss, has

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reached 2,000,000 enrollees in its 1st 6 months

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since launch.

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Cigna launched that program back in March when

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it called the when it called it the

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first ever GLP one management program with a

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financial guarantee for health plans. GLP one medications

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approved for weight loss include Wegovy, Saxenda, and

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Zepbound.

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Those drugs, of course, can cost 1,000 of

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dollars a month. On an August first call

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with investors, Cigna CEO David Cordani said that

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GLP ones are expected to be the number

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one driver of pharmacy benefit trends for plans

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of all sizes this year. Eric Palmer, president

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and CEO of Evernorth, told investors that the

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program is growing nicely, reaching 2,000,000 enrollees so

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far.

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Around 50% of plan sponsors are choosing to

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cover the cost of GLP 1 drugs for

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weight loss for their beneficiaries,

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he said.

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Some estimates predict that as many as 1

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in 10 people in the US will be

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prescribed a GLP one drug over the next

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decade.

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Cigna also isn't sweating the gross the growth

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of the individual coverage health reimbursement arrangement markets

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or ICRA. On an on that August 1st

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call, Brian Ivankoe, CEO of Cigna's insurance segment,

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said that the market is niche, though the

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company is monitoring closely any new developments.

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ICRA's allow employers to offer employees

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contributions to purchase an individual health plan on

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the ACA exchange

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rather than offering a group policy.

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Mister Ivanka told investors that the product is

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likely to be attractive to employers with under

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50 employees,

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a market that is financially immaterial for Cigna.

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He said, all that said, our

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Some insurers including Oscar Health and

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Centene

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have said that they are betting on the

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ICRA market.

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And finally, the 2 midnight rule is driving

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up inpatient costs for Humana. On a July

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31 call with investors, Humana CEO Jim Rechten

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said

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inpatient admissions in Medicare Advantage were higher than

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expected

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in the back half of the second quarter

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of 2024.

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Humana's medical loss ratio was 89%

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in the second quarter. That's up from 86.3%

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in the same period last

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year. Susan Diamond, Humana's CFO,

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said the 2 midnight rule was likely the

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largest factor driving higher inpatient costs.

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At the beginning of 2024, new CMS regulations

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took effect requiring MA plans to provide coverage

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for an inpatient admission rather than observation

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when the admitting physician expects the patient to

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require

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hospital care for at least 2 midnights, though

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insurers do have discretion over this final decision.

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The increased inpatient admissions Humana has observed tend

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to be lower acuity and lower cost. The

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increased inpatient stays correlated to a decrease in

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observation stays, meaning the 2 midnight rule is

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likely to blame for rising utilization rates. Miss

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Diamond said that we would say this is

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also consistent with what we've seen reported from

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the hospital systems with their results in terms

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of volume and revenue per patient. So we

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do believe it's all consistent.

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In April, HCA Healthcare CFO, Bill Rutherford, said

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the 2 midnight rule was providing a moderate

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benefit to the system's revenues.

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Mr. Recton at Humana said the company is

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enhancing claim audits and negotiating with providers to

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mitigate the impact of the rule. He said

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despite the increase in inpatient admissions, the company's

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overall medical benefits ratio was lower than expected

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for the quarter. The company also raised its

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MA member growth expectations for the year offsetting

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the higher inpatient costs. Humana expects to add

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225

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1,000 members in 2024, though the company said

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it also expects to lose a few 100,000

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members through market and plan exits starting next

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year. If you'd like the latest health insurance

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industry news delivered straight to your inbox every

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morning, subscribe to the Becker's Payer Issues e

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newsletter on our website at beckerspayor.com.