1 00:00:00,240 --> 00:00:02,560 This is Jacob Emerson with the Becker's Payer 2 00:00:02,560 --> 00:00:03,620 Issues podcast. 3 00:00:04,000 --> 00:00:07,219 Here's your biweekly industry news briefing for September 4 00:00:07,359 --> 00:00:07,859 23rd. 5 00:00:08,720 --> 00:00:12,179 Maryland is dropping Kaiser Permanente as a Medicaid 6 00:00:12,240 --> 00:00:14,500 managed care organization in 2025. 7 00:00:16,414 --> 00:00:20,035 The state's deputy director of health care finance 8 00:00:20,175 --> 00:00:23,054 told local media on September 20th that after 9 00:00:23,054 --> 00:00:26,175 lengthy contract discussions, the state has elected not 10 00:00:26,175 --> 00:00:28,289 to enter into a contract with Kaiser, and 11 00:00:28,370 --> 00:00:30,449 the state is working to ensure a seamless 12 00:00:30,449 --> 00:00:33,270 transition of those enrollees to other health plans. 13 00:00:33,729 --> 00:00:37,170 Maryland did recently temporarily suspend new enrollments into 14 00:00:37,170 --> 00:00:39,810 Kaiser's Medicaid plan, citing a failure to meet 15 00:00:39,810 --> 00:00:41,030 contractual obligations 16 00:00:41,645 --> 00:00:44,385 related to financial operation reporting requirements. 17 00:00:44,844 --> 00:00:47,085 It is not clear if the Medicaid contract 18 00:00:47,085 --> 00:00:47,585 negotiations 19 00:00:47,885 --> 00:00:50,225 were related to the recent enrollment sanctions. 20 00:00:50,524 --> 00:00:53,164 Maryland is also implementing new health equity standards 21 00:00:53,164 --> 00:00:55,585 for managed care organizations in 2025. 22 00:00:56,670 --> 00:00:59,009 Kaiser has held a Medicaid contract in Maryland 23 00:00:59,070 --> 00:01:01,390 for more than 10 years, and it maintains 24 00:01:01,390 --> 00:01:03,869 the highest rated Medicaid plan in the state 25 00:01:03,869 --> 00:01:04,849 per the NCQA. 26 00:01:06,030 --> 00:01:08,030 Kaiser told Becker's in a statement that if 27 00:01:08,030 --> 00:01:09,685 the company is not able to participate in 28 00:01:09,685 --> 00:01:12,165 Maryland Medicaid, it would interrupt the highest rated 29 00:01:12,165 --> 00:01:14,185 care and coverage for more than 113,000 30 00:01:15,045 --> 00:01:17,225 Medicaid members in Maryland in 2025, 31 00:01:17,924 --> 00:01:19,685 and that Kaiser will continue to work with 32 00:01:19,685 --> 00:01:21,365 the state so that they can continue to 33 00:01:21,365 --> 00:01:22,344 serve that community 34 00:01:22,725 --> 00:01:25,480 for decades to come. The state will renew 35 00:01:25,480 --> 00:01:28,700 its existing managed care contracts with Aetna, CareFirst 36 00:01:28,760 --> 00:01:30,380 Blue Cross Blue Shield, UnitedHealthcare, 37 00:01:31,000 --> 00:01:32,299 Elevance Health's WellPoint, 38 00:01:32,760 --> 00:01:36,120 Jai Medical Systems, Maryland Physicians Care, MedStar Family 39 00:01:36,120 --> 00:01:37,754 Choice, and Priority Partners. 40 00:01:38,314 --> 00:01:40,974 JI Medical and MedStar Family Choice are independent 41 00:01:41,114 --> 00:01:41,935 private companies. 42 00:01:42,314 --> 00:01:45,774 Maryland Physicians Care is co owned by Ascension, 43 00:01:45,834 --> 00:01:48,174 Holy Cross Health, Emeritus Health, and UPMC. 44 00:01:49,515 --> 00:01:52,075 And Priority Partners is owned by Johns Hopkins 45 00:01:52,075 --> 00:01:54,390 Health Plans and the state of Maryland. 46 00:01:57,409 --> 00:01:59,409 Well, after weeks of internal disagreements at the 47 00:01:59,409 --> 00:02:02,370 Federal Trade Commission about pharmacy benefit managers, the 48 00:02:02,370 --> 00:02:04,849 agency said September 20th that it is suing 49 00:02:04,849 --> 00:02:06,469 CVS Caremark, OptumRx, 50 00:02:06,930 --> 00:02:10,615 and Express Scripts over allegedly inflating insulin prices. 51 00:02:11,074 --> 00:02:13,794 In an administrative complaint, the FTC accused the 52 00:02:13,794 --> 00:02:17,074 3 PBMs of abusing their economic power by 53 00:02:17,074 --> 00:02:20,135 rigging pharmaceutical supply chain competition in their favor. 54 00:02:20,599 --> 00:02:23,480 The lawsuit alleges those PBMs excluded low cost 55 00:02:23,480 --> 00:02:26,780 insulins to achieve higher rebates, thus artificially inflating 56 00:02:26,919 --> 00:02:29,180 insulin list prices and hurting patients. 57 00:02:29,639 --> 00:02:31,879 The FTC also said the legal action will 58 00:02:31,879 --> 00:02:34,379 include the company's group purchasing organizations. 59 00:02:35,104 --> 00:02:37,104 In recent years, the FTC has stepped away 60 00:02:37,104 --> 00:02:39,504 from its decades long support of PBMs, which 61 00:02:39,504 --> 00:02:40,644 handle drug pricing 62 00:02:40,944 --> 00:02:41,444 negotiations 63 00:02:41,745 --> 00:02:42,644 between manufacturers, 64 00:02:42,944 --> 00:02:44,164 payers, and pharmacies. 65 00:02:44,784 --> 00:02:47,025 The legal action comes amid the FTC's years 66 00:02:47,025 --> 00:02:49,810 long investigation into the top 6 PBMs over 67 00:02:49,810 --> 00:02:52,069 allegations of opaque business practices. 68 00:02:52,449 --> 00:02:55,250 In July, the FTC published an interim report 69 00:02:55,250 --> 00:02:57,489 on the probe, which said PBMs engage in 70 00:02:57,489 --> 00:02:59,030 favoritism for their own pharmacies 71 00:02:59,330 --> 00:03:02,150 and have a vast control over drug prices. 72 00:03:02,444 --> 00:03:05,104 It's important to note that 2 FTC commissioners 73 00:03:05,165 --> 00:03:06,384 did openly criticize 74 00:03:06,764 --> 00:03:07,425 the report. 75 00:03:08,284 --> 00:03:10,625 The FTC commission's vote to file an administrative 76 00:03:10,764 --> 00:03:14,705 complaint was 3 to 2 with 2 commissioners 77 00:03:14,844 --> 00:03:15,985 recusing themselves. 78 00:03:16,949 --> 00:03:19,750 Cigna, which owns Express Scripts, has filed its 79 00:03:19,750 --> 00:03:22,569 own lawsuit against the FTC on September 17th 80 00:03:22,870 --> 00:03:25,449 over the interim support interim report. 81 00:03:25,750 --> 00:03:28,889 The company called that report unfair, biased, erroneous, 82 00:03:29,030 --> 00:03:29,770 and defamatory. 83 00:03:31,564 --> 00:03:34,064 CVS told Becker's that its PBM has negotiated 84 00:03:34,284 --> 00:03:37,405 lower insulin prices and increased competition after 3 85 00:03:37,405 --> 00:03:38,864 leading brand insulin manufacturers 86 00:03:39,245 --> 00:03:41,004 raised their list prices by as much as 87 00:03:41,004 --> 00:03:41,504 500% 88 00:03:42,205 --> 00:03:43,344 before 2012. 89 00:03:44,689 --> 00:03:47,250 Then the Pharmaceutical Care Management Association, which is 90 00:03:47,250 --> 00:03:48,129 the trade group represent 91 00:03:48,930 --> 00:03:49,829 representing PBMs, 92 00:03:50,129 --> 00:03:53,169 spoke out against that lawsuit. The National Community 93 00:03:53,169 --> 00:03:57,314 Pharmacists Association, which represents pharmacies, applauded the FTC's 94 00:03:57,314 --> 00:03:57,814 actions. 95 00:03:58,995 --> 00:04:01,555 Well, OptumCare, which is located in Basking Ridge, 96 00:04:01,555 --> 00:04:03,314 New Jersey, is planning to lay off a 97 00:04:03,314 --> 00:04:03,814 160 98 00:04:04,115 --> 00:04:06,915 employees in the state according to regulatory documents 99 00:04:06,915 --> 00:04:09,635 filed with the states. Those layoffs are expected 100 00:04:09,635 --> 00:04:10,295 to occur 101 00:04:10,650 --> 00:04:12,750 between December 11th January 102 00:04:13,050 --> 00:04:13,550 22nd 103 00:04:14,010 --> 00:04:14,750 next year. 104 00:04:15,449 --> 00:04:17,930 Optimus faced several rounds of layoffs and clinic 105 00:04:17,930 --> 00:04:20,569 closures this year across various states. In July, 106 00:04:20,569 --> 00:04:22,189 the company laid off 524 107 00:04:22,889 --> 00:04:25,775 employees in California, which included remote positions in 108 00:04:25,775 --> 00:04:26,595 other states. 109 00:04:27,134 --> 00:04:29,455 Earlier this year, there were reports servicing on 110 00:04:29,455 --> 00:04:32,335 social media about layoffs affecting employees at Optum 111 00:04:32,335 --> 00:04:33,795 Virtual Care and NaviHealth. 112 00:04:34,254 --> 00:04:36,735 And, additionally, in May, Optum closed a changed 113 00:04:36,735 --> 00:04:39,569 health care facility in Toledo, Ohio, which resulted 114 00:04:39,569 --> 00:04:40,629 in 129 115 00:04:41,169 --> 00:04:41,990 job losses. 116 00:04:43,569 --> 00:04:46,050 Cigna Health Care is exiting Medicare Advantage Markets. 117 00:04:46,050 --> 00:04:48,610 We're making service area reductions in 8 states 118 00:04:48,610 --> 00:04:49,350 for 2025. 119 00:04:49,970 --> 00:04:53,024 In total, 36 plans and about 54100 members 120 00:04:53,024 --> 00:04:55,845 are impacted, the vast majority in Florida. 121 00:04:56,305 --> 00:04:58,324 The majority of the markets have low membership 122 00:04:58,625 --> 00:05:01,745 and alternative MA plans available with the exception 123 00:05:01,745 --> 00:05:04,004 of just a few full county exits. 124 00:05:04,464 --> 00:05:05,524 There's a list of 125 00:05:06,459 --> 00:05:09,180 Medicare Advantage market exits industry wide on the 126 00:05:09,180 --> 00:05:10,240 Becker's website, 127 00:05:10,620 --> 00:05:12,939 and there's more details about these Cigna exits 128 00:05:12,939 --> 00:05:15,339 on our website as well, including state by 129 00:05:15,339 --> 00:05:17,339 state and the types of plans that are 130 00:05:17,339 --> 00:05:17,839 affected. 131 00:05:19,004 --> 00:05:22,045 Southwestern Health Resources will not offer Medicare Advantage 132 00:05:22,045 --> 00:05:23,025 Plans in 2025. 133 00:05:23,645 --> 00:05:25,665 The company said it has decided to sunset 134 00:05:25,725 --> 00:05:28,205 its MA plan because of increasing competition and 135 00:05:28,205 --> 00:05:28,705 utilization 136 00:05:29,245 --> 00:05:32,384 along with regulatory requirements from the federal level. 137 00:05:32,939 --> 00:05:34,699 There are will be no changes for members 138 00:05:34,699 --> 00:05:37,019 in 2024, but there will be no plans 139 00:05:37,019 --> 00:05:39,500 to enroll in during the upcoming open enrollment 140 00:05:39,740 --> 00:05:40,959 annual enrollment period. 141 00:05:41,500 --> 00:05:44,539 Southwestern Health Resources is based in Farmers Branch, 142 00:05:44,539 --> 00:05:48,079 Texas. It operates CarenCare, an MA company. 143 00:05:48,754 --> 00:05:52,035 They had about 26,000 Medicare Advantage members according 144 00:05:52,035 --> 00:05:52,855 to CMS. 145 00:05:53,235 --> 00:05:56,035 Southwestern Health Resources is a joint venture between 146 00:05:56,035 --> 00:05:56,935 UT Southwestern 147 00:05:57,235 --> 00:05:59,495 Medical Center and Texas Health Resources. 148 00:06:00,289 --> 00:06:02,050 If you like the latest health insurance industry 149 00:06:02,050 --> 00:06:04,129 news delivered straight to your inbox every morning, 150 00:06:04,129 --> 00:06:06,470 subscribe to the Becker's payer issues e newsletter 151 00:06:06,689 --> 00:06:08,470 on our website at beckerspayer.com.