1 00:00:00,080 --> 00:00:02,419 This is Emerson with the Becker's Payer Issues 2 00:00:02,480 --> 00:00:02,980 podcast. 3 00:00:03,439 --> 00:00:06,660 Here's your biweekly industry news briefing for September 4 00:00:06,719 --> 00:00:07,219 30th. 5 00:00:07,919 --> 00:00:11,119 Average Medicare Advantage premiums and Medicare part d 6 00:00:11,119 --> 00:00:13,219 premiums will decrease in 2024 7 00:00:13,679 --> 00:00:16,635 according to CMS on September 27th. 8 00:00:17,254 --> 00:00:19,994 The average Medicare Advantage monthly premium in 2025 9 00:00:20,454 --> 00:00:21,274 will be $17. 10 00:00:21,894 --> 00:00:22,875 That's down from 11 00:00:23,255 --> 00:00:23,755 $18.23 12 00:00:25,175 --> 00:00:25,754 this year. 13 00:00:26,054 --> 00:00:28,469 The average total part d premium will decrease 14 00:00:28,469 --> 00:00:28,969 by 15 00:00:29,589 --> 00:00:32,329 $7.45 next year to a total of $46.50. 16 00:00:34,390 --> 00:00:36,549 The average stand alone part d plan premium 17 00:00:36,549 --> 00:00:38,570 will decrease slightly to $40. 18 00:00:39,030 --> 00:00:41,085 The average part d premium for MA plans 19 00:00:41,085 --> 00:00:43,424 with prescription drug coverage will decrease, 20 00:00:44,045 --> 00:00:44,784 to $13.50. 21 00:00:46,924 --> 00:00:49,405 A provision of the Inflation Reduction Act can 22 00:00:49,405 --> 00:00:51,564 capping out of pocket prescription drug costs of 23 00:00:51,564 --> 00:00:52,064 $2,000 24 00:00:52,445 --> 00:00:54,304 a year for Medicare beneficiaries 25 00:00:55,085 --> 00:00:56,545 takes effect in 2020 26 00:00:57,030 --> 00:01:00,170 5. CMS has offered plans a voluntary demonstration 27 00:01:00,309 --> 00:01:03,109 program to stabilize premiums as planned to implement 28 00:01:03,109 --> 00:01:05,510 the out of pocket cap. The vast majority 29 00:01:05,510 --> 00:01:07,769 of plans opted into the demonstration. 30 00:01:09,269 --> 00:01:10,650 The agencies $5,000,000,000 31 00:01:11,269 --> 00:01:14,155 to keep part a premiums stable, and it 32 00:01:14,155 --> 00:01:15,295 projects 35,700,000 33 00:01:16,474 --> 00:01:19,355 people will enroll in Medicare Advantage Plans in 34 00:01:19,355 --> 00:01:19,855 2025. 35 00:01:21,515 --> 00:01:24,795 Well, Centerra Health in Norfolk, Virginia is cutting 36 00:01:24,795 --> 00:01:27,329 about 200 jobs, with the majority of those 37 00:01:27,329 --> 00:01:29,429 cuts coming from its health plan division. 38 00:01:29,890 --> 00:01:32,209 Other cuts are corporate shared service positions that 39 00:01:32,209 --> 00:01:34,629 function in support of health plan operations. 40 00:01:35,250 --> 00:01:37,890 Cuts span at multiple levels with 40% being 41 00:01:37,890 --> 00:01:40,530 in leadership positions. A final number of job 42 00:01:40,530 --> 00:01:42,674 cuts has not been determined as the system 43 00:01:42,674 --> 00:01:45,094 works to find affected employees other roles 44 00:01:45,395 --> 00:01:48,534 within the system. Sentara said that Medicaid redeterminations 45 00:01:48,995 --> 00:01:51,015 have resulted in its health plan losing 46 00:01:51,395 --> 00:01:51,895 115,000 47 00:01:52,275 --> 00:01:54,295 members, which is approximately 16% 48 00:01:54,674 --> 00:01:55,575 of its membership. 49 00:01:56,115 --> 00:01:58,969 Said the cuts align staffing levels with its 50 00:01:58,969 --> 00:02:00,030 health plan membership. 51 00:02:00,569 --> 00:02:02,909 The cuts themselves, though, represent less than 1% 52 00:02:02,969 --> 00:02:04,189 of Sentara's 34,000 53 00:02:04,810 --> 00:02:07,290 total employees across the health system side as 54 00:02:07,290 --> 00:02:10,724 well. The impacted positions span 10 states with 55 00:02:10,724 --> 00:02:12,824 a majority residing in Virginia. 56 00:02:15,044 --> 00:02:17,764 Well, CVS has struggled financially this year, and 57 00:02:17,764 --> 00:02:20,324 investors are now taking action. According to a 58 00:02:20,324 --> 00:02:22,104 new report from the Wall Street Journal, 59 00:02:22,405 --> 00:02:24,585 shares in the company have fallen around 24% 60 00:02:25,044 --> 00:02:27,530 this year, and CVS plans to lay off 61 00:02:27,590 --> 00:02:28,969 29 100 employees, 62 00:02:29,270 --> 00:02:31,289 which is less than 1% of the company, 63 00:02:31,590 --> 00:02:34,330 and those are roles primarily corporate roles. 64 00:02:34,870 --> 00:02:37,349 The health care company cut its earnings guidance 65 00:02:37,349 --> 00:02:39,625 multiple times in the last 12 months, primarily 66 00:02:39,625 --> 00:02:42,764 due to rising costs within Aetna's Medicare business. 67 00:02:43,224 --> 00:02:46,525 The company's pharmacy benefit unit also has issues. 68 00:02:46,665 --> 00:02:49,944 The FTC is scrutinizing CVS Caremark over alleged 69 00:02:49,944 --> 00:02:51,405 insulin price inflation. 70 00:02:52,290 --> 00:02:54,610 Senior executives from CVS are meeting with the 71 00:02:54,610 --> 00:02:57,569 leaders of Glenview Capital Management, a hedge fund 72 00:02:57,569 --> 00:02:58,870 investor this week. 73 00:03:00,290 --> 00:03:03,330 They are discussing ways to improve operations at 74 00:03:03,330 --> 00:03:05,330 the company. The meeting could launch, 75 00:03:06,014 --> 00:03:08,834 an activist stance from the hedge funds. 76 00:03:10,414 --> 00:03:11,935 One of the leaders of the hedge funds 77 00:03:11,935 --> 00:03:14,014 told the Wall Street Journal that he intends 78 00:03:14,014 --> 00:03:16,414 to present ways to energize the company, but 79 00:03:16,414 --> 00:03:17,875 not break up the company. 80 00:03:18,789 --> 00:03:21,829 Back in August, CEO Karen Lynch unveiled plans 81 00:03:21,829 --> 00:03:22,489 for $2,000,000,000 82 00:03:23,030 --> 00:03:25,269 in cost cuts and parted ways with Aetna's 83 00:03:25,269 --> 00:03:25,769 president. 84 00:03:26,150 --> 00:03:29,189 She, along with CBS CFO, Tom Cowhey, are 85 00:03:29,189 --> 00:03:31,209 managing the insurance company now. 86 00:03:33,034 --> 00:03:35,115 Well, a new bill will require some forms 87 00:03:35,115 --> 00:03:38,014 of insurance in California to pay for IVF. 88 00:03:38,314 --> 00:03:41,694 Governor Gavin Newsom signed that legislation September 29th. 89 00:03:41,995 --> 00:03:44,395 The bill requires large group insurers to cover 90 00:03:44,395 --> 00:03:47,115 the diagnosis and treatment of infertility, including in 91 00:03:47,115 --> 00:03:48,014 vitro fertilization, 92 00:03:48,610 --> 00:03:50,770 which can be a very expensive service, often 93 00:03:50,770 --> 00:03:52,469 costing up to $20,000 94 00:03:52,770 --> 00:03:53,909 per round of treatment. 95 00:03:54,290 --> 00:03:56,689 The legislation applies to large group plans, which 96 00:03:56,689 --> 00:03:58,870 cover around 9,000,000 people in California. 97 00:03:59,170 --> 00:04:02,290 Legislation does not apply to Medicaid enrollees or 98 00:04:02,290 --> 00:04:05,485 people who receive coverage from religious employers. The 99 00:04:05,485 --> 00:04:07,324 law goes into effect in July of next 100 00:04:07,324 --> 00:04:09,745 year for private sector employees and in 2027 101 00:04:10,205 --> 00:04:12,385 for California state employees. 102 00:04:15,004 --> 00:04:17,645 The University of Vermont Health Network and MVP 103 00:04:17,645 --> 00:04:19,759 Health Care will no longer offer their joint 104 00:04:19,759 --> 00:04:22,819 Medicare Advantage Plans in Vermont in 2025. 105 00:04:24,240 --> 00:04:27,600 MBB Healthcare is based in Schenectady, New York. 106 00:04:27,600 --> 00:04:29,759 It said it will no longer offer UVM 107 00:04:29,759 --> 00:04:32,339 Health Advantage, which is a co branded plan 108 00:04:32,720 --> 00:04:35,524 offered with the University of Vermont Health with 109 00:04:35,644 --> 00:04:36,925 and it will no longer be offered in 110 00:04:36,925 --> 00:04:37,904 the state of Vermont. 111 00:04:38,444 --> 00:04:40,925 UVM Health Advantage will still be available in 112 00:04:40,925 --> 00:04:43,345 5 upstate New York counties in 2025. 113 00:04:44,204 --> 00:04:46,365 The company said it could know Medicare Advantage 114 00:04:46,365 --> 00:04:49,389 was no longer sustainable in Vermont given sharply 115 00:04:49,389 --> 00:04:52,529 increasing post pandemic surges in care utilization 116 00:04:52,910 --> 00:04:55,629 and difficult regulatory changes on the horizon in 117 00:04:55,629 --> 00:04:56,129 2025. 118 00:04:57,150 --> 00:04:59,150 There have been other health systems this year 119 00:04:59,150 --> 00:05:02,144 that have scaled back their Medicare Advantage plans. 120 00:05:04,224 --> 00:05:07,425 Well, 2 US democratic senators have introduced the 121 00:05:07,425 --> 00:05:10,084 Health Care Affordability Act, which aims to permanently 122 00:05:10,144 --> 00:05:13,024 extend the Affordable Care Act's enhanced premium tax 123 00:05:13,024 --> 00:05:16,870 credits for marketplace coverage. The credits were originally 124 00:05:16,870 --> 00:05:19,269 extended through the Inflation Reduction Act and are 125 00:05:19,269 --> 00:05:21,050 set to expire at the end of 2025. 126 00:05:21,669 --> 00:05:24,089 If they're not renewed, over 20,000,000 Americans 127 00:05:24,629 --> 00:05:26,629 will see higher health insurance costs with an 128 00:05:26,629 --> 00:05:29,910 estimated 3,000,000 losing coverage and about 9,000,000 paying 129 00:05:29,910 --> 00:05:30,194 more. 130 00:05:30,754 --> 00:05:33,795 Identical legislation was introduced in the house as 131 00:05:33,795 --> 00:05:36,355 well. The tax credits increased the subsidies for 132 00:05:36,355 --> 00:05:38,055 individuals earning between 104100% 133 00:05:38,835 --> 00:05:41,335 of the federal poverty level and expanded eligibility 134 00:05:41,475 --> 00:05:43,095 for those earning above 400% 135 00:05:43,475 --> 00:05:44,855 of the federal poverty 136 00:05:45,870 --> 00:05:48,850 level. Debates surrounding the ACA have shifted recently 137 00:05:48,910 --> 00:05:51,709 from repeal and replace to discussions on the 138 00:05:51,709 --> 00:05:53,889 impending expiration of those subsidies. 139 00:05:54,269 --> 00:05:56,269 Former president Donald Trump has said he would 140 00:05:56,269 --> 00:05:58,589 consider changing the ACA only if a less 141 00:05:58,589 --> 00:06:00,444 expensive alternative is proposed. 142 00:06:00,824 --> 00:06:02,985 And while the Republican Party has moved away 143 00:06:02,985 --> 00:06:06,584 from repeal efforts, lawmakers have expressed concerns about 144 00:06:06,584 --> 00:06:08,444 fraud on the state exchanges. 145 00:06:09,144 --> 00:06:11,464 Marketplace enrollment reached a record high of more 146 00:06:11,464 --> 00:06:12,204 than 20,000,000 147 00:06:12,584 --> 00:06:13,324 in 2024, 148 00:06:13,704 --> 00:06:15,000 partly due to those subsidies. 149 00:06:15,620 --> 00:06:18,120 Making those subsidies permanent would also add $335,000,000,000 150 00:06:19,459 --> 00:06:22,020 to the national deficit between next year and 151 00:06:22,020 --> 00:06:22,520 2034, 152 00:06:23,300 --> 00:06:26,100 according to the congressional budget office. Public support 153 00:06:26,100 --> 00:06:29,375 for making those credits permanent remains high with 154 00:06:29,375 --> 00:06:29,875 78% 155 00:06:30,335 --> 00:06:32,115 of Americans in favor. 156 00:06:35,295 --> 00:06:36,435 Well, in a reversal, 157 00:06:37,055 --> 00:06:39,694 a quick reversal, Maryland has said it will 158 00:06:39,694 --> 00:06:40,740 contract with Kaiser 159 00:06:41,539 --> 00:06:44,419 Permanente as a Medicaid managed care organization in 160 00:06:44,419 --> 00:06:44,919 2025. 161 00:06:45,939 --> 00:06:47,939 Just a few days before this decision, the 162 00:06:47,939 --> 00:06:50,500 Maryland Department of Health told local media that 163 00:06:50,500 --> 00:06:52,579 it would drop Kaiser as a Medicaid MCO 164 00:06:52,579 --> 00:06:55,625 in 2025 after lengthy contract negotiations. 165 00:06:56,165 --> 00:06:59,305 Maryland had also recently temporarily suspended new enrollment 166 00:06:59,525 --> 00:07:02,324 in Kaiser's Medicaid plan, citing a failure to 167 00:07:02,324 --> 00:07:05,384 meet contractual obligations related to financial operational 168 00:07:05,925 --> 00:07:06,985 reporting requirements. 169 00:07:07,605 --> 00:07:10,100 Kaiser has held a Medicaid contract in Maryland 170 00:07:10,100 --> 00:07:11,399 for over a decade, 171 00:07:11,699 --> 00:07:13,939 and it maintains the highest rated in terms 172 00:07:13,939 --> 00:07:16,980 of quality Medicaid plan in the state, by 173 00:07:16,980 --> 00:07:17,639 the NCQA's 174 00:07:18,100 --> 00:07:19,080 national standards. 175 00:07:19,779 --> 00:07:22,020 The state will also renew its existing managed 176 00:07:22,020 --> 00:07:23,960 care contracts with 8 other organizations 177 00:07:24,339 --> 00:07:27,285 that includes both insurers and a few health 178 00:07:27,285 --> 00:07:28,425 system backed companies. 179 00:07:28,964 --> 00:07:29,625 That contract, 180 00:07:30,004 --> 00:07:31,305 appears to more than a 113,000 181 00:07:32,164 --> 00:07:34,024 residents in the state of Maryland. 182 00:07:36,805 --> 00:07:39,444 And finally, a jury has determined that Blue 183 00:07:39,444 --> 00:07:39,839 Cross 184 00:07:41,839 --> 00:07:42,480 and Blue Shield of Louisiana shortchanged a New 185 00:07:42,480 --> 00:07:45,139 Orleans based surgical center by more than $400,000,000. 186 00:07:46,639 --> 00:07:48,339 That was, late September. 187 00:07:48,800 --> 00:07:51,199 The jury determined the payout following a 7 188 00:07:51,199 --> 00:07:53,425 year legal fight between the insurance company 189 00:07:54,324 --> 00:07:54,824 and 190 00:07:55,725 --> 00:07:55,884 St. Charles Surgical Hospital and Center for restorative 191 00:07:55,884 --> 00:07:57,115 breast surgery, which is a privately owned surgical 192 00:07:57,115 --> 00:07:58,685 center that provides breast surgery reconstructions to cancer 193 00:07:58,685 --> 00:07:59,665 patients. BCBS 194 00:08:00,045 --> 00:08:02,064 Louisiana was accused of shortchanging 195 00:08:02,524 --> 00:08:04,545 the center on thousands 196 00:08:08,899 --> 00:08:10,439 of breast reconstruction surgeries. 197 00:08:10,819 --> 00:08:13,939 The jury jury determined that BCBS committed fraud 198 00:08:13,939 --> 00:08:16,819 when it authorized around 78 100 surgeries from 199 00:08:16,819 --> 00:08:18,040 2015 to 2023 200 00:08:18,580 --> 00:08:20,420 and then paid only about 9% of the 201 00:08:20,420 --> 00:08:21,399 related claims. 202 00:08:21,779 --> 00:08:24,020 The Safe Civil Court verdict was the surgery 203 00:08:24,020 --> 00:08:27,074 center's 3rd attempt to seek payment. That's after 204 00:08:27,074 --> 00:08:29,894 2 previous cases were dismissed in federal court. 205 00:08:30,435 --> 00:08:32,855 BCBS denied that it had acted fraudulently, 206 00:08:33,394 --> 00:08:35,075 and it's important to note here that because 207 00:08:35,075 --> 00:08:37,575 the hospital is not a member of BCBS's 208 00:08:38,019 --> 00:08:40,919 provider network, BCBS argued it had no contractual 209 00:08:40,980 --> 00:08:43,879 obligation to pay any of it. In Louisiana, 210 00:08:44,019 --> 00:08:46,820 about 93% of all physicians and hospitals belong 211 00:08:46,820 --> 00:08:48,600 to the Blue Cross network. 212 00:08:49,059 --> 00:08:51,139 A spokesperson for Blue Cross told Becker's that 213 00:08:51,139 --> 00:08:53,284 while the company appreciates and values the legal 214 00:08:53,284 --> 00:08:56,105 process, it strongly disagrees with the jury's verdict, 215 00:08:56,245 --> 00:08:58,485 and it will quickly appeal and expects to 216 00:08:58,485 --> 00:08:59,304 be successful. 217 00:09:00,404 --> 00:09:02,725 That hospital was founded in 2003 and had 218 00:09:02,725 --> 00:09:04,245 been a part of the Blue Cross network 219 00:09:04,245 --> 00:09:06,164 until about a decade ago when it dropped 220 00:09:06,164 --> 00:09:09,209 out alleging that reimbursement rates were not, 221 00:09:09,589 --> 00:09:10,329 high enough. 222 00:09:10,709 --> 00:09:13,190 It continued to treat Blue Cross patients though 223 00:09:13,190 --> 00:09:15,690 because the surgeries were authorized by the insurer, 224 00:09:15,909 --> 00:09:17,829 but the surgeons only received a fraction of 225 00:09:17,829 --> 00:09:19,129 the charges they billed. 226 00:09:19,509 --> 00:09:21,990 BCBS had argued that authorizing a treatment does 227 00:09:21,990 --> 00:09:23,615 not guarantee guarantee payment. 228 00:09:23,995 --> 00:09:24,735 That $421,000,000 229 00:09:25,835 --> 00:09:27,674 award, though, it's one of the largest ever 230 00:09:27,674 --> 00:09:30,955 in Louisiana, which is known for large jury 231 00:09:30,955 --> 00:09:31,455 awards. 232 00:09:32,955 --> 00:09:34,715 If you'd like the latest health insurance industry 233 00:09:34,715 --> 00:09:36,975 news delivered straight to your inbox every morning, 234 00:09:36,990 --> 00:09:39,149 subscribe to the Becker's payer issues e newsletter 235 00:09:39,149 --> 00:09:40,769 on our website at beckerspayer.com.